ABN Amro plans to invest 1 bn in India

ABN Amro plans to invest 1 bn in India

The Dutch-based ABN Amro Bank proposes to invest €1 billion through selective acquisitions in India.

The foreign bank intends to focus on the organic growth model and has applied to the central bank for converting its branch licence to that of a subsidiary.

At the same time, the bank's chief executive Rijkman Groenink stated that ABN Amro is likely to use the mergers and acquisitions route to enhance revenue both in India and the US.

He was speaking at a conference organised by Goldman Sachs in London.

Besides from making acquisitions, the proposed investment would be used to build ABN Amro's franchise and enhance its brand name in the country.

ABN Amro, the largest Dutch bank, plans to grow organically in India. According to the bank's roadmap, it hopes to be in 100 cities in the next few years, with the initial plan to expand to 30 cities.

Currently ABN Amro has 16 branches spread across 11 cities. The idea behind expanding its reach, like in the case of most foreign banks, is to increase its distribution network.

Acquisitions thus will help the Dutch bank to increase its market share in India. With a limited network at present, the foreign bank fears that without expanding its reach it will remain a small player in the country.

In China ABN Amro also wishes to expand its retail business using its banking licence and local asset-management capabilities. It has central processing facilities in Taiwan, where Groenink said ''small additions'' were possible to support the growth of ABN Amro's activities on the mainland.

Meanwhile, ABN Amro globally has been through a major restructuring that included cutting jobs and selling off businesses, which helped boost net profit by 31 per cent last year to € 3.16 billion.