To eliminate 50-odd staffers as part of global restructuring.
Royal Bank of Scotland (RBS) announced on Thursday it was exiting its unprofitable cash equities and mergers advisory operations worldwide — and is scouting for buyers for these businesses in India.
RBS, in which the UK government has an 83 per cent stake, is looking to separately sell its cash equities, corporate broking, equity capital markets (ECM) and mergers and acquisitions (M&A) businesses in India, according to persons familiar with the matter. “It’s unlikely there will a single global buyer for the businesses RBS wants to exit,” says one of them. “The Indian operations are likely to be sold on a stand-alone basis.”
RBS said it was considering sale or closure options for its cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses globally, given that they were currently unprofitable. “We are in discussions with a number of potential buyers,” the bank said. “There is no assurance of a sale concluding.”
RBS intends to retain its equity and fixed income derivatives internationally, the firm added.
The businesses RBS, according to an analyst at a Mumbai-based brokerage who tracks the broking industry in India, has put on block globally are doing well in India. “True, the environment is tough right now, but international firms looking for expansion or entry into India will be interested in buying these businesses,” he notes. “It’s unlikely that any of the established players in these businesses will be among the bidders. One plus one is not two in broking.”
CUTTING JOBS
According to the statement, RBS will cut 3,500 jobs as a result of sale or closure of the affiliated businesses, which will be split between UK and non-UK locations. This will affect about 50 jobs in India, according to persons familiar with the matter.
RBS will join the list of global financial services firms such as Barclays, HSBC, Nomura, Credit Suisse and Morgan Stanley, which have cut jobs in their Indian units, prompted by slowing growth in home markets, rising cost pressures and a worsening macro-economic environment.