BackRs3,000 cr ABN Amro diamond business in India to go to RBS
Rs3,000 cr ABN Amro diamond business in India to go to RBS
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Mumbai: The Rs3,000 crore diamonds and jewellery business of Dutch bank ABN Amro Holding NV’s Indian arm will go to Royal Bank of Scotland (RBS) and not Fortis, the European banking and insurance firm. Fortis had been due to inherit the business after joining RBS and Banco Santander in the takeover of ABN Amro in October last year.
(THREE-WAY SPLIT) The deal envisaged Fortis acquiring the Dutch bank’s asset management and private banking businesses as well its international diamonds and jewellery unit.
But the deal has been reworked for India because Fortis does not have a banking licence in the country.
ABN Amro’s international diamonds and jewellery business and the private banking business along with its commercial banking assets and liabilities are being acquired by RBS.
The business covers Belgium, the US, Hong Kong, Japan and India, offering services targeted at miners, dealers, manufacturers and retailers.
“Fortis doesn’t have a banking licence to do this business in India," said Meera H. Sanyal, executive vice-president and country executive at ABN Amro’s Indian unit. “They are in the process of applying for a banking licence. In the interim period, the business will be managed by Royal Bank of Scotland in India."
The 12-member Indian diamond business team has been working closely with the global unit, Sanyal said.
ABN Amro has been operating in India since 1920. It has 28 branches and has received approval from the Reserve Bank of India to open three more. The lender has 9,000 employees in India.
“Throughout Asia and the US, ABN Amro’s private clients and asset management businesses will join Fortis, strengthening Fortis’ position as a global player in both private banking and asset management," the Dutch bank said on a website set up to inform the public about developments related to its takeover.
“Exceptions are the private clients units in India and Indonesia which will go to RBS and the ABN Amro private client units in Latin America as well as a part of asset management in Brazil; these will join Santander," it said.
In the takeover negotiations, RBS displayed interest in retaining ABN Amro’s private banking business, said a senior ABN Amro official with knowledge of the developments but refused to be named because he is not authorized to speak to the media.
“RBS wanted the business as it would strengthen its existing international private banking business that runs under the brand name RBS Coutts," this official said. RBS Coutts has a substantial non-resident Indian business managed out of Singapore and an onshore presence in India will complement the business, the official added.
Following the transition, the ABN Amro private clients business in India will operate under the RBS Coutts brand.
ABN Amro’s private banking team has about 60 staff located in five branches in India, including 30 private bankers.
RBS, however, is not keen to retain the retail broking business launched by ABN Amro in India, the same official said. The Dutch bank had launched retail broking business in May 2006 and India was the first Asian country in which this service was launched.
“It wants to only continue with institutional clients business," the official said. “RBS is in talks with various foreign entities who are keen to buy the retail broking business.’’ Sanyal said she is not aware of any such move.
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