Mumbai: Australia and New Zealand Banking Group Ltd (ANZ) looks set to return to India after a gap of nine years by acquiring the local operations of ABN Amro Bank NV, now a part of Royal Bank of Scotland Plc. (RBS). ANZ had exited India in 2000, after selling its Grindlays Bank unit to Standard Chartered Plc. for $1.34 billion (Rs6,525 crore today).
ANZ has overtaken StanChart and DBS Group Holdings Ltd, Singapore’s largest bank, in the race to aquire the India assets of ABN Amro.
Each of the three banks have discussed plans for the acquisition with the Reserve Bank of India (RBI) and, according to a central bank official who did not want to be identified, RBI is “comfortable” with ANZ making the purchase.
“Standard Chartered Bank, ANZ and DBS had informed RBI before placing their bids for RBS Asia, which includes India operations,’’ said the RBI official. “We have conveyed to Standard Chartered Bank that it will not be possible for us to transfer the 31 branch licences of ABN Amro Bank to them.’’
According to this official, DBS already has 10 branches in India out of which eight branch licences were given recently. “ANZ has negligible presence in India and hence among the three it has an edge. However, it all depends on the global negotiations of RBS. After that is finalized, ANZ and RBS will come to us with a formal proposal,’’ he added.
Paul Edward, group general manager (corporate communications) at ANZ, in an email response from Australia, said: “ANZ has a strategy to create a ‘super regional’ bank focused on the Asia-Pacific region, including China and India. As part of this, we explore opportunities from time-to-time. We do not comment on market speculation.’’
V. Vasantha Kumar, head (marketing and communication) at the local unit of ABN Amro, in an email response, said: “We have launched a strategic review of our business, which will be completed by the end of second quarter of 2009. We will provide an update when we report our year-end results on 26 February and if any decisions are taken on disposals (of India assets), these will be announced as and when they are made.’’
RBS, Fortis Group of the UK, and Banco Santander SA of Spain acquired the assets of ABN Amro in October 2007.
On account of the global meltdown and increasing pressure on profitability, the Edinburgh-headquartered RBS had said in January that it might end up posting a loss of up to £28 billion (Rs1.96 trillion today) in 2008. RBS is 70% owned by the UK government, which has infused fresh capital in it. It is expected to sell parts or all of its Asian business.
ABN Amro, which is a part of the RBS Group, has operations in India, Pakistan, Hong Kong, China, Taiwan, Malaysia, Indonesia, Singapore, Vietnam, Japan and Australia.
A senior official from a Mumbai-based headhunting firm said ANZ had started the process of hiring people. “They are in talks with a few senior officials of Citibank and Standard Chartered Bank to run their India operations,’’ he added.
ANZ is present in India through a wholly owned subsidiary, ANZ Capital Pvt. Ltd, a non-banking finance company. Besides, it runs a business process outsourcing unit in Bangalore, running all technology operations and shared service functions of ANZ in India, and any work that is offshored from other parts of the world to India.
This is ANZ’s second attempt to enter the Indian banking space. In 2006, it sought to buy a stake in IndusInd Bank Ltd, but later abandoned the plan.
Standard Chartered Bank recently acquired American Express Bank, a unit of American Express Co., which in India gave it access to seven branches. StanChart has 90 branches across 33 cities in India.Rs.
ABN Amro has been operating in India since 1920. It has 9,000 employees spread over 31 branches. Its loan assets in India grew 28% to Rs36,617 crore in fiscal 2008, from Rs28,518 crore in 2007. The Indian operations reported a 27% decline in net profit for 2007-08 to Rs280.60 crore, from Rs385.30 crore in the previous fiscal year.