Media reports are suggesting that Royal Bank of Scotland Group PLC (RBS) is in talks to sell its Asian operations to Standard Chartered and Australia and New Zealand Banking Group (ANZ). This deal is expected to fetch approximately US$1 bn-US$1.5 bn, reinforcing the bank's liquidity position. However, we expect the company to report further writedowns over our investment horizon. Considering this, we maintain our 6-12 month SELL rating, even though the target price derived in our last update report does not support a SELL. We will reassess our common stock rating in our next update report. We expect to revert to a 6-24 month investment horizon in our next update report as we now anticipate a significant positive currency impact on the ADR over the medium-to-long term. Consequently, we upgrade the ADR from a SELL to a HOLD. We will reassess our ADR (1 ADR = 20 common shares) rating in out next update report.

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