KARACHI, Feb 26 The Royal Bank of Scotland announced on Thursday that the new owner of the RBS was being explored in Pakistan.

The announcement appeared in a notification to the Karachi Stock Exchange which officially confirmed that the RBS which is the hardest hit bank in Europe is selling its operations in Pakistan.

At least three financial institutions reportedly remained engaged in scrutinising the balance-sheet of the bank as part of due diligence.

“As part of the strategic review announcement, RBS has announced its intention to explore new ownership for the retail and commercial, GBM and GTS business in Pakistan,” said a notice of the bank to the KSE.

The bank also explained reasons why bank`s operation was put on sale.

“There are several reasons why this decision has been made. The current capital constraints on the RBS Group and the need for RBS to reduce the size of its balance-sheet means it is unable to provide the investment the business in Pakistan requires to achieve its growth potential,” said the RBS.

It further said the decision recognises the strength for the customer franchise Pakistan business has built and also the growth potential on this particular business.

“At this stage, we are unable to confirm details surrounding the potential sale, but we can confirm that it has generated considerable interest from potential purchasers reinforcing the value and potential of the business in Pakistan,” said the RBS.“We will, of course, continue to meet our legal and regulatory obligations in Pakistan and to ensure that our business continues to be managed in an orderly way through the transition phase we are about to enter,” said the RBS notification.

The RBS has lost $34 billion since the beginning of global financial crisis and the Government of England had to come to its rescue. Now the government owns 68 per cent stakes of the bank.

The Guardian reported last month that there were expectations that government`s next move would be to fully nationalise the stricken Edinburgh-based bank.

The newspaper also quoted an analyst who said “full-scale nationalisation” is the most likely step for RBS if the second banking bail-out fails to work.

The bank lost 66 per cent value since it came in trouble last year. The taxpayer is sitting on a £12.5bn loss on its 58 per cent stake which has now gone to 68 per cent.

The situation was extremely unfavourable for the bank to continue its operations in the countries, like Pakistan where it entered just before the financial crisis.

In Pakistan, the RBS acquired ABN Amro in August 2008 with enthusiasm to become one of the biggest foreign banks in Pakistan with a total asset of Rs117 billion and a branch network of 79 across Pakistan.