Royal Bank of Scotland (RBS) has agreed to sell its multi-billion-pound structured product portfolio to BNP Paribas, according to industry sources. The decision was made by the UK bank on November 13, and will be followed by the signing of a head of terms, after which the negotiation and documentation of final terms and conditions is expected to be agreed and ratified by the first week of 2014.
The deal is the latest in a series of structured product and equity derivatives portfolio purchases by BNP Paribas. The French bank acquired Crédit Agricole’s product book at the end of October, and was also successful in winning the mandate to take over 2,500 structured products with a €1 billion ($1.35 billion) notional that were sold by Macquarie in 2012.
The notional value of the RBS portfolio is roughly £175 billion ($282 billion). Of that figure, £30 billion belongs to the client franchise, with £65 billion in listed options and futures and £80 billion in over-the-counter products, the sources say. The portfolio, which consists of thousands of predominantly retail products, is highly concentrated in Europe but includes some products from the US and a smattering from Asia-Pacific. All asset classes are represented in the mix.