Mumbai: Standard Chartered Bank Plc could be close to clinching a deal with Royal Bank of Scotland (RBS) to acquire its assets in India and China. In its half-yearly income statement, the bank stated that it is in discussions to buy some small businesses in India and China, which may or may not result in a transaction. If the transaction goes through, the consideration is likely to be in the “low hundreds of millions of dollars.’’
Interestingly, the bank is planning to raise about £1 billion, or $1.6 billion, to take full advantage of the opportunities emerging from the crisis, “in which Asia will emerge faster than the rest of the world”.
“As we have said many times before, looking—or even discussing—and actually doing, are by no means the same thing. We have to be convinced of the strategic logic, the cultural and business fit and, above all, it has to make financial sense,’’ the statement said.
Neeraj Swaroop, regional chief executive, Standard Chartered Bank, India and South Asia, refused to comment on the possible acquisitions in India. “We would look at a possible acquisition if it adds to our geography or product capabilities,’’ he said.
A senior official familiar with the development said, “Standard Chartered is interested in RBS’ liabilities book, private banking portfolio and their relationship managers in India. The bank is also expected to get around 18 of the 31 branches RBS has in India. These branches would be in non-metros which the bank could tap for liabilities and small and medium enterprises business. This also serves the Reserve Bank of India’s (RBI) inclusive growth agenda.’’
StanChart currently has 90 branches in the country and has received RBI approval to open four more. India is a key market and has contributed 19%, the second highest after Hong Kong, to the bank’s profit in the first half of 2009. The India wholesale banking operations of StanChart emerged the largest contributor to the lender’s global revenues. The bank’s operating profit from Indian operations is down 13.20% to $526 million for the half year ended June.
The bank also saw a rise of $94 million in loan impairments in the half year ended June. “The rise in non-performing loans is largely on the personal loans book which we are not growing aggressively for the past eight months now,” said Swaroop.