Japanese bank Sumitomo Mitsui Financial Group (SMFG) <8316.T> is set to buy the aircraft-leasing business of Royal Bank of Scotland
RBS said in a statement that the deal would be announced to the market on Tuesday.
RBS Aviation is being sold as RBS shrinks back to its core British retail and commercial banking business. It marks the biggest disposal since the bank started aggressively downsizing when the taxpayer was forced to rescue it just over three years ago, giving the state 83 percent ownership.
Reaching agreement on a deal of this scale in such a volatile market is a significant success for our non-core division and a credit to SMBC, RBS's finance director Bruce Van Saun said in a statement.
This transaction further evidences our progress in reducing our non-core portfolio and returning the group to a position of strength.
SMFG had been fighting China Development Bank and U.S. bank Wells Fargo
The Nikkei business daily said Sumitomo Mitsui Banking Co, Sumitomo Mitsui Finance and Leasing Co and trading house Sumitomo Corp <8053.T> will team up for the deal.
Dublin-based RBS Aviation is one of the world's top five commercial airline leasing firms. It owns, manages or has orders for 329 aircraft, leasing to 65 airlines in 24 countries.
It has a team of 69 executives in Dublin, New York, Hong Kong, Beijing, Shanghai, Singapore, Tokyo, Seattle and Toulouse. The business last year had a book value of $6.8 billion.
RBS tried to sell the business in 2009 but scrapped that auction a year later amid difficult market conditions.
Aircraft leasing is seen as attractive as it offers the prospect of steady returns with the relative security of hard assets that are easy to move around to tap growth wherever it emerges.
(Additional reporting by Shounak Dasgupta in Bangalore; Editing by Joyjeet Das and Steve Orlofsky)