Royal Bank of Scotland is to increase its exposure to China with an initiative to sell credit cards in the country through a joint venture with Bank of China. The move will mark a deepening of Royal Bank’s relationship with its partner, in which the Edinburgh-based bank led a consortium of banks to take an almost 10pc stake last September.

Credit cards are China’s fastest-growing consumer product, according to the consulting firm McKinsey, but lenders face the problem that most customers lack personal credit histories, making it hard to assess their riskiness. Many of China’s banks are also struggling with bad loans.Royal Bank said it believed Bank of China had chosen it because of its expertise in the credit card market. "We have got years of experience in risk management in the credit card environment," a spokesman said.

RBS has 11m credit card customers in the UK, issued under brands including Mint, NatWest and through its joint venture with Tesco. The bank would not give a timetable for the launch of the credit cards. The move will come after Bank of China floats on the stock market later this week, in what is set to be the biggest flotation in six years.

The pricing of Bank of China’s shares this week values it at more than $90bn, making it one of the world’s 10 largest banks by market capitalisation. Royal Bank, Merrill Lynch and Li Ka-shing, the Hong Kong tycoon, paid £1.65bn for a 9.6pc stake in Bank of China last August. Royal Bank is looking at an estimated £70m profit from its £800m investment. Royal Bank is not taking up its rights to the new shares, in a move which will see it reduce its holding from 5.16pc to 4.6pc. Overall, the consortium’s stake is falling from 9.6pc to 8.6pc. ( telegraph.co.uk )