Cash-strapped Royal Bank of Scotland (RBS) is reviewing its branding agreement with cricketer Sachin Tendulkar a year into the deal.
The bank, which is fearing losses up to £28 billion on account of a sub-prime driven cash shortage, did not comment on the tenure of the endorsement deal citing commercial confidentiality. A source, however, said it is in line with other brand ambassadors who signed on with the bank for five years.
The deal with the Indian batsman was part of a rebranding strategy after RBS took over ABN Amro in 2007 in one of the world's largest cross-border banking deals. RBS is awaiting clearance from the Reserve Bank of India to rename the India operations. The bank has stepped up cricket-related advertisements and sponsored the winter series in India involving Australia and England.
Now, with chances of RBS being nationalised, an official spokesperson told Business Standard that the bank’s sponsorship activity needed to be restructured.
Tendulkar was added to the elite list of the bank’s other global ambassadors such as racing driver Jackie Stewart, golfers Jack Nicklaus and Luke Donald and champion show-jumper Zara Phillip (who is also Queen Elizabeth's grand-daughter). Industry sources said the 35-year old cricketer charges Rs 3 crore to Rs 4 crore per endorsement.
In response to a questionnaire from Business Standard, an Edinburgh-based spokesperson for the bank said: “We recognise the need to ensure that our sponsorship activity reflects the process of restructuring that the bank has underway… We are trying our best to strike the appropriate balance between the constraints of fulfilling our contractual obligations and of course maintaining the benefit of some key activities to our customer businesses."
The list of companies that believe Brand Tendulkar no longer works for them has lengthened in recent months. After Fiat, TVS and Airtel and PepsiCo decided to end the long relationship with the world’s highest run-maker. The former captain, however, still commands among the highest premium in the market and endorses a host of brands ranging from Adidas to Aviva, Britannia, Boost, Canon and Visa.
RBS, which is expected to declare its annual results by the end of February, employs over 10,000 people in India, the bank’s third largest employment centre globally.