China’s Super Rich Targeted By Private Banking


The Royal Bank of Scotland (RBS) and the Bank of China (BOC) have opened their joint venture to provide private banking services to wealthy individuals in China. This is the first such service to be offered by a major Chinese bank, and is aimed at customers with at least $1m (£515k) of investible assets.

The two banks announced a strategic partnership in 2005, with RBS taking a 5% stake in BOC. The new venture reflects RBS’s view of the long-term growth potential in China. Whatever you think about RBS as a company, the Scots don’t make any financial moves without thinking long and hard, and usually get their sums right.

RBS and its high street subsidiary Natwest may do good business, with 2006 end-of-year profits of £9bn, but it is coming in for a growing amount of criticism over its approach to environmental and ethical issues. A student boycott is threatened over its huge investments in global oil and gas projects. A new report accuses the bank of going on a “destructive binge with potentially devastating consequences for the planet”. The response from RBS, which markets itself as the “Oil and Gas Bank”, is to attempt to discredit the report and deny involvement in many of the projects it mentions.

RBS still maintains there is no scientific consensus over the causes of climate change, but there’s no doubt they’re doing their bit. Since 2001, RBS has provided over £5bn in oil and gas loans and participated in over £15bn worth of related projects. Carbon pollution from the projects amounted to almost 37 million tonnes in 2005, the report claims, more than total expected emissions from Scotland. This is more than a hundred times higher than the pollution for which RBS accepts responsibility.

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6 Responses to China’s Super Rich Targeted By Private Banking

  1. matt says:

    > This is more than a hundred times higher than the pollution for which RBS accepts responsibility.

    A bank accepting responsibility for carbon emissions! My god, the carbon-army really is changing perceptions.

    Brown announced today in his budget speech that revenues from the North Sea have dropped from 11billions to 8billions and will continue to drop further. I’m sure the RBS is however heavily involved in oil ‘exploitation’ in poorer countries such as Angola (which has announced major off-shore oil reserves this week) and happily shipping the profits out of the country before the war torn population can spend any on basic food stuffs. Typical bankers.

  2. Pete Smith says:

    RBS’s involvement with the oil and gas sector goes back to the North Sea boom in the 80s. It’s got global ambitions now. Follow the links in my original post for the full gory details, but some highlights are:
    RBS has helped drive the take off of LNG projects over the last ten years, participating in over $30 billion of deals. In 2005, RBS was the top adviser and lead arranger to the global LNG industry.
    In December 2005, RBS and three other banks arranged a $270 million loan to the Satellite Oil Fields Project in the Niger Delta.
    RBS was the only British bank to participate in a $1.6 billion loan agreement for BP’s Baku-Tbilisi-Ceyhan pipeline, described by the Financial Times as “one of the world’s most controversial oil pipeline projects”
    RBS has been bidding for over a year to become lead arranger for Shell’s Sakhalin II project in the Arctic. Despite major political risks and a terrible environmental record, RBS is one of only six banks still interested in arranging finance for the project.
    Over its life-time, Sakhalin II will pump 17.3 trillion cubic feet of natural gas and 1 billion barrels of oil, causing total carbon emissions of 1539 million tonnes (and the probable extinction of the Western Gray Whale by building drilling rigs next to the whale’s only known summer feeding ground)

  3. Pete Smith says:

    RBS only publishes stats for its own internal emissions, e.g. bank vehicles, heat and power, that kind of thing. What is has never done is publish figures on the embedded emissions of investment projects it has been involved in. That really would be admitting responsibility.

  4. matt says:

    The young men of Niger Delta aren’t too happy about foreign investors;

  5. matt says:

    Further heavy handedness from RBS, this time with their own staff! ;

  6. Pete Smith says:

    It’s always been possible for RBS employees to bank anywhere they like. The bank prefers to pay salaries via an internal transfer to an RBS account, rather than via Direct Debit to an external account, because it’s cheaper. But there’s never been anything to stop you just transferring all your cash out to Barclays or whoever on pay day and paying all your bills etc from there. The only downside was that RBS got a bit sniffy about agreeing to staff loans and mortgages if they couldn’t ‘see’ all outgoings.
    I’m amazed at the claim there are over 14000 RBS staff who hold their primary account elsewhere. I can only assume these are hard core ex-NatWest guys who still haven’t got over the 2000 mugging, sorry, takeover, sorry, merger.
    I think this is probably just a storm in a teacup to be honest.

    Afterthought: actually they might well be more recent takeover victims, like Churchill Insurance.

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