RBS plans to exit commercial, retail businesses in India

Written by Press Trust of India | New Delhi | Updated: Mar 1 2009, 04:09am hrs
The Royal Bank of Scotland (RBS) plans to sell its retail and commercial business in India as part of the restructuring exercise, a move that follows the bank recording biggest annual loss of 24 billion pounds.

As a result of the strategic review RBS has announced its intention to consider options, including a potential sale of its retail and commercial business in Asia Pacific. This includes the retail and commercial business in India, said an official spokesperson of the UK-based bank said.

Without giving further details and the time frame by which it will exit from the specified portfolio, the spokesperson said wealth management portfolio would also be part of the sale strategy.

RBS, present in India through ABN Amro Bank which it acquired in 2007, employs about 10,000 people.

ABN Amro currently has a network of about 31 branches across the country and operate in various segment including credit card and BPO operation. RBS is currently seeking regulatory permission from the Reserve Bank for change in the name.

Earlier this month HSBC had said, it may look at acquiring some product businesses of RBS in Asia if that adds value to its operations.

It has to be strategic fit, it has to be at the right price we would look at it, HSBC India Group general manager and CEO Naina Lal Kidwai had said when asked whether the bank would look at the acquisition of product businesses of RBS if it is available for sale.

We will look at everything as we should and determine fit and price and then decide...and for us certainly the region (Asia) is the focus, she said.

According to the presentation made by RBS chairman Philip Hampton on Thursday target retail and commercial exit outside UK, Ireland and US.

He also said that it will streamlined footprint, while maintaining global proposition. However, India is in the list of primary countries.

As part of the revival strategy, the bank is planning shift about 20% of funded assets to non-core division for disposal.

The bank is planning to cut more than 2.5 billion pound out of the cost base.

While acknowledging that 2008 results were bad, Hampton said it will restructured compensation and comprehensive cost reduction is underway.

The global economic downturn will test us again in 2009, he said, adding all our efforts are now focused on the path to recovery.