Mumbai: The Royal Bank of Scotland Group Plc., or RBS, has launched its wealth management business in India, after the central bank approved the renaming of ABN Amro Bank NV’s non-banking finance arm as RBS Financial Services. The wealth management business, which will function under RBS Financial Services, has been named Royal Wealth Management.
RBS, the UK’s Fortis Group and Spain’s Banco Santander SA had acquired the global assets of Dutch lender ABN Amro Holdings NV in October 2007. In India, Fortis is set to run ABN Amro’s asset management unit while RBS will acquire the wholesale, retail and private banking businesses.
“RBS Financial Services is planning to set up five centres across the country, of which two centres are in Mumbai. The non-banking finance arm will act as a distribution arm of the bank,” said an ABN Amro Bank official. “Apart from distributing wealth management products, RBS Financial Services will also sell other asset products and...enter the business of collection of non-performing assets.”
Expansion plans: An RBS outlet in Mumbai. RBS Financial Services plans to set up five centres across the country, with two in Mumbai.The non-banking finance arm will act as the bank’s distribution unit.
The official, who didn’t want to be named as he is not the bank’s official spokesperson, added Royal Wealth Management would launch and market in India the services and products of RBS Coutts, RBS’ global private banking arm.
Mint had reported on 26 August that the Reserve Bank of India (RBI) had objected to RBS operating ABN Amro’s Indian business under two separate entities: RBS and RBS Coutts. An RBI official had then said, “Coutts is a separate entity and approval for use of the brand name would effectively mean allowing a backdoor entry for a bank.”
In October, ABN Amro’s non-banking finance arm, the erstwhile ABN Amro Securities (India) Pvt. Ltd received the Foreign Investment Promotion Board’s approval to widen its scope of activity from a primary dealership. In December, RBI transferred the primary dealership licence—which enables a firm to trade in government securities—to ABN Amro Bank.
“As part of our expansion plans we are looking at distribution of wealth products under the brand name of Royal Wealth Management and currently we have two outlets in Mumbai,” V. Vasantha Kumar, senior vice-president and head of marketing and communications for ABN Amro Bank in India, said in an email. “Further details on our expansion plans will be announced shortly, once they are finalized.”
ABN Amro has been operating in India since 1920 and has 9,000 employees in 28 branches. The lender’s assets in India grew 28% to Rs36,617 crore in fiscal 2008, while its net profit declined 27% to Rs280.6 crore.
On Monday, ABN Amro said it will post a full-year loss from continuing operations of about €13 billion (Rs84,240) after investment-banking losses.
RBS, which bought ABN Amro’s investment banking business, said it may post a loss of as much as much£28 billion (Rs2.02 trillion).
Bloomberg contributed to this story.