The Royal Bank of Scotland is looking to sell off its 1,000-strong pub network, in an attempt to limit further financial loss by exiting the shrinking on-trade beer market.

Royal Bank of Scotland (RBS) is willing to sell some or all of the pubs, which are managed by Scottish & Newcastle Pub Enterprises, just-drinks understands from a source familiar with the situation.

Beer sales are at their lowest since the 1930s in the UK and an average five pubs are closing their doors for good every day, according to the British Beer and Pub Association.

RBS is 58%-controlled by the government after the Treasury last autumn announced an emergency bailout package, using public money, to keep the bank afloat. The bank already faces GBPbillions in losses, which is thought to have made disposals a priority.     

An RBS spokesperson declined to comment on the pub sales speculation last night (12 January).

The bank indicated its view of the UK pub sector, however, by downgrading the country's largest pub owner, Punch Taverns, from buy to hold yesterday.

Punch shares slumped amid an RBS warning that the group would likely have to use up spare cash flow to repay debt. In the last 18 months, Punch shares have collapsed from close to GBP13 in mid-2007 to less than GBP0.60 at midday today. The group is set to issue a trading update on the 14 January.