(Adds further comment, detail, background)
By Jonathan Saul
LONDON Nov 15 Royal Bank of Scotland (RBS)
is reviewing its shipping loan business and is expected
to place billions of dollars from the portfolio in the
part-nationalised group's new internal "bad bank", sources
familiar with the matter said.
The industry sources said the group's shipping exposure was
now being examined as part of new Chief Executive Ross McEwan's
strategic review, the results of which are due in February.
RBS declined to comment.
"A big chunk will go into the bad bank and the intention
there is to sell it down as quickly as possible," one source
said. "They will definitely also exit a number of relationships
even on performing loans. It will be a much smaller exposure for
a much smaller bank. This is coming from outside of the shipping
The sources said that an estimated $4 billion to $5 billion
of shipping loans are expected to go into the bad bank, with the
total shipping portfolio now standing at an estimated $16
RBS, 81 percent owned by British taxpayers, said this month
that it would create an internal "bad bank" to fence off its
riskiest assets, part of a series of measures designed to heal
its relationship with the government and speed its eventual
(Additional reporting by Matt Scuffham; Editing by David