» Business » RBS to retain 8,000 employees in India

RBS to retain 8,000 employees in India

By BS Reporter in Mumbai
March 20, 2009 09:55 IST
Get Rediff News in your Inbox:

The Royal Bank of Scotland, which operates in India under the ABN Amro brand, said on Thursday that it intended to retain a few branches in India and around 8,000 employees after the sale of its retail and SME banking business as part of a strategy to focus on key markets. The unit had contributed around 30 per cent of RBS's revenue from its India and Asia-Pacific operations.

At present, the bank has around 10,000 employees in India, with 7,500 in Aces, its business process outsourcing unit and product development centre, while another 500 are in the non-retail banking units, who would be retained.

The bank's chairman Philip Hampton, who held consultations with the Reserve Bank of India, told media persons that the structure of the sale was yet to be finalised. He said that, as of now, only a preliminary information memorandum had been circulated after Morgan Stanley had been appointed as the advisor for the intended sale in eight countries in Asia Pacific, including India.

"The simplest way is everything goes to a single buyer paying the maximum price," Hampton said, when asked if the India business would be sold separately. Bankers estimate the Indian retail and SME banking unit to fetch around $600 million (around Rs 30 billion).

On the sale of ABN Amro's branches along with its assets and liabilities, he said that the RBI rules would deal with it on a case-by-case basis. The bank has 31 branches in India and its rebranding to RBS is awaiting RBI's approval. To acquire branches, a bank needs regulatory approval and the bankers, who are looking at ABN Amro's business on the block, have said that RBI clearance was one issue on which they needed clarity before bidding.

Hampton said that the bank had decided to exit markets such as India, which it had said were non-core, as retail banking was a mass market business, with mass market capability.

"It is a nice business to be in but if we had limitless capital. And we do not have limitless capital," said Hampton, who joined the RBS board in January as deputy chairman before being elevated to his present job in early February.

Hampton had announced the restructuring roadmap three weeks into his new job and after record losses of $462 billion, which he attributed to the acquisition of ABN Amro in 2007, including a loss in goodwill. He pointed out that there were write-offs to the tune of $1 billion on ABN Amro's exposure to Bernard Madoff's ponzi scheme, while adding that more write-offs were possible in 2009 on account of other exposures.
Get Rediff News in your Inbox:
BS Reporter in Mumbai
Source: source

Moneywiz Live!