ABN Amro’s wage bill soars in 2008-09: RBI data

ABN Amro’s wage bill soars in 2008-09: RBI data

New Delhi: The Indian arm of the Royal Bank of Scotland-owned ABN Amro witnessed a sharp spurt in its wage bill during 2008-09 which constituted more than a quarter of its total expenses, the highest among the major foreign banks operating in the country.

Wages as percentage of the total expenses for the ABN Amro Bank, which is in the process of selling its retail and commercial banking operations in the country, shot up from 19.91 to 25.61% during the year, reveals an RBI analysis of the banking sector in the country.

The efforts to elicit response from the bank proved futile as neither ABN Amro’s managing director Meera Sanyal nor its spokesperson replied to the queries sent through e-mail.

The wage bill as percentage of total expenses for the other major foreign banks was lower with Deutsche Bank spending 24.33% on employees followed by Standard Chartered Bank at 21.09%, HSBC at 18.01% and Citibank at 17.56%.

For the 30 foreign banks operating in the country through a network of about 300 branches, wages accounted for 19.45% of total expenses.

Having started operations in the country in 1920, the ABN Amro Bank today has 30 branches and employing about 3,200 persons.

ABN Amro, which was taken over by the RBS in 2007, also witnessed decline in profit per employee to 0.62 lakh during 2008-09 from 7.66 lakh in the previous year.

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.

Besides low per employee profitability, ABN Amro also witnessed sharp increase in its net Non-Performing Asset (NPA) ratio, suggesting a 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, the new owner of ABN Amro Bank, is reportedly in advanced discussions with bidders for selling part of the operations in certain Asian markets, including that in India.

Besides the Indian operations, the RBS is also looking at selling retail and commercial banking assets of ABN Amro Bank in Pakistan, China and Malaysia.