New Delhi: Indian arm of the Royal Bank of Scotland (RBS)-owned ABN Amro Bank saw profit per employee nosediving during 2008-09, unlike other major foreign banks Citibank and Stanchart which manged to maintain profitability despite the impact of global financial crisis.
ABN Amro, which was taken over by the RBS in 2007 and is currently in the process of selling its retail and commercial operations, witnessed decline in profit per employee to Rs0.62 lakh during 2008-09 from Rs7.66 lakh in the previous year, says RBI data on the banking sector.
The efforts to obtain response from bank proved futile as the queries sent through e-mail to ABN Amro’s Country Head Meera Sanyal and the spokesperson remained unanswered.
In August, Moody’s lowered the credit rating of the parent ABN Amro Bank NV, citing weakening of its core earnings potentials.
Unlike the ABN Amro, other major foreign banks did well with Citibank reporting profit per employee of Rs45.12 lakh during 2008-09, followed by Standard Chartered Bank at Rs23.82 lakh and HSBC at Rs16.06 lakh.
Among other foreign banks, the profit per employee figure for Deutsche Bank was Rs26.90 lakh and for DBS Bank, which opened eight new branches during 2008-09, was Rs 72.16 lakh.
ABN Amro Bank, which started operations in India in 1920, has 30 branches and employees about 3,200 persons in the country.
ABN Amro Bank’s profit per employee declined sharply during 2006-07 to Rs7.66 lakh from Rs11.36 lakh a year ago.
The business per employee figure, which is an indicator of the efficiency and productivity, slipped to dismal level in 2008-09 to Rs0.62 lakh, significantly below the average of Rs24.78 lakh recorded by 30 foreign banks operating in the country.
Besides, low per employee profitability, ABN Amro Bank also witnessed sharp increase in its net non-performing asset (NPA) ratio, suggesting sharp spurt in bad loans.
The net NPAs of the bank rose to 2.2% of its assets in 2008-09 from 0.85%, which is only a shade better than the crisis-ridden Citibank.
The RBS, which acquired global operations of ABN Amro Bank, is in advanced discussions with bidders for selling its retail and commercial banking businesses in certain Asian markets, including that in India.
Besides Indian operations, the RBS is also looking at selling retail and commercial banking assets of ABN Amro Bank in Pakistan, China and Malaysia.