Royal Bank of Scotland (RBS) has hung a “for sale” sign on the overseas arm of Coutts, its private banking business for millionaires.

Staff at the taxpayer-owned bank were told on Monday that, following a review of its “High Net Worth” businesses, RBS is considering selling or restructuring Coutts International.

In a message to employees, Alison Rose, the head of RBS’s commercial and private bank, reassured staff that the UK arm of Coutts, which accounts for most of the division’s business and includes the Queen among its customers, was not for sale.

“We will now work with local management teams to explore options including merging the remainder of the current Coutts International business, considering joint ventures or a sale, thereby reducing RBS’s footprint internationally,” the message said.

A strategic review announced by RBS chief executive Ross McEwan in February saw Coutts, which dates back to the 17th century, subsumed into RBS’s UK commercial bank in an attempt to streamline operations.

Ms Rose said RBS would continue to serve wealthy expats but that Coutts’ overseas operations were too small to deliver appropriate returns. The bank has scaled back internationally as Mr McEwan focuses on RBS’s domestic business.

“We face a challenging path… given the dynamics of compressed margins and the increasing need for scale in international businesses,” Ms Rose said.

Coutts International employs around 1,200 people in seven countries, though none in the UK. It made an operating profit of £68m last year, and could be valued at up to £650m.

  • dtpg coutts 8 / Bank Coutts