Intesa says Coutts international arm less valuable than whole group

By Silvia Aloisi

MILAN (Reuters) - Intesa Sanpaolo (ISP.MI) will definitely consider bidding for Royal Bank of Scotland's (RBS.L) wealth management arm Coutts if the whole unit is put up for sale but is less inclined to buy only its international operations, its chief said on Friday.

Flush with 16 billion euros ($20 billion) of excess capital, Italy's biggest retail lender is seeking to expand into private banking and asset management - particularly in Switzerland, Asia, the United States and Britain.

As part of that plan, Intesa Chief Executive Carlo Messina did not rule out bidding for Coutts' overseas business, which RBS put up for sale in August, but said this was a less prized asset than the whole group with its British franchise.

"If it were put up for sale as a whole, I'd definitely consider it," he told reporters. "The international arm is less valuable, because they don't give you the brand with it."

Coutts, founded in the 18th century and best known as banker to Queen Elizabeth, is in the process of sending out information memorandums to potential buyers and expects first round bids before year-end, a source close to the situation said this week.

Goldman Sachs (GS.N) is advising on the sale, for which Julius Baer (BAER.VX), the Swiss private bank, expressed interest in September. Sources have said the deal could net as much as $1 billion.

With interest rates at record lows, Intesa - like domestic rival UniCredit (CRDI.MI) - looks to boost profits by expanding in high commission-earning wealth management in Italy and abroad.

"We are looking at triple A countries, with no geopolitical risk," Messina said, in a strategic shift away from the bank's past international ventures in countries like Ukraine and Hungary. "I do not consider central and eastern Europe an important growth area," he said.

Messina said he expected a wave of consolidation among Italian cooperative lenders that could lead to the creation of a sizeable domestic competitor for Intesa and UniCredit.

"I think in one year's time the Italian banking sector will look different from today, in terms of the number of players if nothing else."

(Editing by Mark Heinrich)