Mumbai: Hongkong and Shanghai Banking Corp. Ltd (HSBC) and Royal Bank of Scotland NV (RBS) have started making joint calls to clients even as HSBC awaits the Reserve Bank of India’s (RBI’s) approval to acquire the retail and small and medium enterprises business of ABN Amro Bank NV, a part of RBS, in India.
HSBC entered the bidding race for select Asian assets of RBS in October 2009 after talks between Standard Chartered Plc and RBS broke down over differences on the valuation of assets.
In February 2009, RBS had declared that it would move its India retail and commercial banking operations, which employ 2,500 people, into a for-sale, non-core division. Morgan Stanley is advising RBS on the sale.
“HSBC relationship managers (RMs) are accompanying the ABN Amro Bank RMs when they visit the Van Gogh preferred banking customers of the Dutch bank,’’ said a bank client, who did not want to be quoted.
This platform provides relationship banking services to businesses and high net-worth individuals, meeting their wealth management and business banking requirements.
ABN Amro introduced Van Gogh preferred banking in India in 2002 and it is available across all 31 branches in 23 cities.
In an email response to Mint’s query, an RBS spokeswoman said, “RBS is in ongoing discussions for the remaining retail and small and medium enterprises assets it has decided to sell in Asia and we will not be making any further comment at this stage.”
An HSBC spokesman said, “We do not comment on market rumours.”
Two RBS officials with knowledge of the development, but who did not want to be named, said HSBC was keen to retain the Van Gogh preferred banking customers. “However, it is not interested in other businesses such as unsecured loans,” one of the executives said. “It wants to align the RBS portfolio in accordance with its business focus.”
Accordingly, ABN Amro Bank is winding down its personal loan and credit card business in India. Many of its employees selling retail loan products such as credit cards and personal loans have been asked to leave. In the beginning of the fiscal, the bank’s consumer banking team employed 2,850 people, and at least 500 of them have left so far.
HSBC is going slow on retail loans after its India operations saw a 44% drop in operating profit for the year ended 31 December to $374 million (Rs1,701 crore), on account of increased losses.
Personal financial services, HSBC’s consumer banking business, reported a loss of $219 million against a loss of $155 million last year. In the past three years (2007-2009), HSBC’s consumer banking operations has reported losses of $444 million.