StanChart, Nomura vie for ABN Amro arm

Nomura, Japan's financial services group, Standard Chartered Bank (StanChart), the UK-based Asia-African bank, and US-based Morgan Stanley are in the race to acquire ABN Amro Asia Equities (India), the broking arm of Netherlands-based ABN Amro Bank.

The broking arm is a subsidiary of ABN Amro Asset Management in India, which along with the private banking business of the Dutch bank would be bought by Europe's Fortis as a part of a deal for the acquisition of ABN Amro Bank globally.

Fortis wants to sell the institutional and retail broking subsidiary of ABN Amro Asset Management and has already received interests from Nomura, StanChart and Morgan Stanley, according to banking sources.

The sources said, "Foreign institutions are eyeing the brokerage business as this gives them a readymade platform to access institutional portfolios. This also enables them to scale up their existing operations.''

ABN Amro Bank is in the process of being acquired in a ¤71 billion deal by a consortium of Royal Bank of Scotland (RBS), Fortis and Banco Santander.

According to the arrangement, the private banking and asset management business of ABN Amro would be bought by Fortis and the retail and corporate banking business by RBS.

The bank's asset management business in India has assets under management of around Rs 8,000 crore, of which the brokerage business constitutes about 5 per cent. In May 2006, the Netherlands-based bank had launched the retail broking business.

Last year, Fortis, a banking and insurance major, had partnered with IDBI Bank and Federal Bank to float a life insurance company. Recently, Lehman Brothers bought the institutional brokerage business of Mumbai-based Brics Securities.

In August, StanChart acquired 49 per cent stake in UTI Securities for Rs 147 crore. This acquisition gave a big boost to the bank's retail broking business.

The institutional broking business in India is worth $1 billion and growing at 15-20 per cent a year, which has lured Wall Street majors such as Morgan Stanley, Goldman Sachs and Merrill Lynch.