StanChart close to buying RBS retail assets in India

Refusing to name acquirer, RBS says deal may be sealed soon.

Standard Chartered has emerged as the front-runner to acquire Royal Bank of Scotland’s (RBS’) retail and commercial banking business in India. The business did not figure in Australia and New Zealand Banking Group’s (ANZ’s) acquisition of the RBS franchise in six Asian countries.

While sources confirmed that Standard Chartered was in talks with RBS to acquire some of its assets in India, China and Malaysia, the bank did not identify the name of the target.

If the deal was struck, the money involved would be around $100 million (around Rs 475 crore), Standard Chartered CEO Asia Jaspal Bindra told Reuters after a news conference.

An RBS spokesperson refused to comment on potential acquirers, but said: “We are in advanced stages of discussions with potential bidders for the remaining assets we are selling in Asia and expect to make further announcements shortly.”

RBS has been in talks with several players to sell its retail and commercial banking operations in several countries, including India, where this segment has nearly 2,000 employees. It, however, intends to retain global banking and markets, global transaction services and wealth management businesses along with its back-office. Taken together, these employ around 8,000 people. The sale of these businesses is part of a strategy to focus on the UK and core markets to conserve capital.

Announcing Standard Chartered’s plans to raise 1 billion pounds (around Rs 8,000 crore) to fund its growth in Asia and increase capital strength, bank CEO Peter Sands said: “This is not a war chest.” In a conference call, he said acquisitions in India and China would only cost “low hundreds of millions of dollars” and added that “this is about us staying ahead of the game”.

The RBS assets in India, China and Malaysia were not acquired by ANZ in the $550-million deal covering Singapore, Taiwan, Indonesia, Hong Kong, the Philippines and Vietnam.

In response to a question from Business Standard, ANZ CEO Mike Smith said the bank did not intend to go ahead with the acquisition as it did not have the people to manage integration and regulatory challenges.

Sources said one of the key hurdles was the Reserve Bank of India’s (RBI’s) policy that does not allow banks to transfer licences. In case of an acquisition, the acquirer has to seek fresh licences. RBS, which operated in India under the ABN Amro brand, has 31 branches and intended to keep only a few of the licences to keep global banking and markets and GTS businesses going.

“RBS will continue to be a leading global wholesale, transaction and private bank with a significant presence in Asia in the 11 markets, which account for 90 per cent of our revenues in the region. We will continue to serve our clients from our four global hubs in Hong Kong, Singapore, Tokyo and Sydney; our markets in India, China, Indonesia, Malaysia, Korea and Thailand, and our securities business in Taiwan,” John McCormick, CEO, global banking & markets, Asia-Pacific, and Asia Pacific chairman for the RBS Group, said in a statement.