RBS eyes ABN Amro's private banking

In talks with Fortis to retain Dutch bank's division in India.

Royal Bank of Scotland (RBS) is negotiating with Fortis to retain the private banking business of ABN Amro Bank in India with itself.

Globally, ABN Amro Bank is being taken over by a consortium including RBS, Fortis and Santander. According to the global deal, Fortis will be owning ABN Amro Bank's asset management and private banking business.

"RBS is negotiating with Fortis to retain the private banking business of the Dutch bank with itself in India. In India, ABN Amro Bank brings to the table a consumer banking franchise and the private banking business,'' said a banking source. The bank has 28 branches in the country and has received the Reserve Bank of India's (RBI) approval to set up three more branches. 
 

STRONG NUMBER ABN Amro Bank's performance
(Rs crore)	2004	2005	2006	2007
Total assets	10,609.77	15,395.28	23,539.99	32,077.67
Deposits	5,856.44	7,025.98	11,863.77	15,998.30
Advances	6,696.59	9,836.45	15,073.22	18,387.55
Interest	761.37	907.39	1,376.11	2,274.19
Net profit	194.80	195.23	241.68	385.35
Gross NPA	215.63	226.88	51.11	100.87
Net NPA	59.22	34.59	16.47	21.28
CAR (%)	13.48	10.55	10.44	11.34

"If you take away the private banking business in India, RBS will be left with just the consumer banking business, which is a small portfolio. Globally, the consortium is working on asset allocation. It is also working on the asset allocation across various geographies,'' added the source.

The Dutch bank's business in India was around Rs 34,386 crore in 2006-07, said the RBI data.

"We cannot comment on market speculation," said an RBS spokesperson in a telephonic reply to an email query.'' The Asia-Pacific region delivered 105 per cent growth in income for RBS in the year to June 2007.

The bank has recently invested significantly in its global banking and markets business and wealth management division. Combining RBS and ABN Amro's wholesale business will create an entity that will figure among the top-five corporate and institutional banks in Asia-Pacific (ex-Japan).

RBS has a growing wealth management business in the region, which serves the rapidly growing number of affluent customers.

Combining with ABN Amro's retail activities in the area, there is a strong opportunity to build businesses in select countries, accelerating the group's wealth management strategy and adding capability to offer credit cards and a potentially broader product range.

"Fortis, which will own the asset management business of the Dutch bank, is also not keen to retain the securities business. Hence, the consortium is evaluating the options of hiving off the equities business to a third party or leaving it with ABN Amro. Fortis has received interest from Nomura, StanChart and Morgan Stanley to acquire the broking business of the bank,'' said a banking source.