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Business News/ Companies / StanChart won’t bid for RBS’ Asia assets, cites bad quality
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StanChart won’t bid for RBS’ Asia assets, cites bad quality

StanChart won’t bid for RBS’ Asia assets, cites bad quality

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Mumbai: Standard Chartered Bank Plc has decided against submitting a bid for the Asian assets of Royal Bank of Scotland Group Plc (RBS), citing bad asset quality of the RBS book.

“We have not submitted a bid for the Royal Bank of Scotland asset in Asia. After due diligence, we found that the quality of assets are bad," said a senior official with Standard Chartered. When asked if the decision had anything to do with the possibility that the Reserve Bank of India (RBI) might not grant branch licences, the official added, “That we had already discounted—the fact that we would not get the Royal Bank of Scotland branches in India."

An RBS spokesperson said in an email response: “We are well advanced with the sale process, however, due to the confidentiality of this process we cannot comment on the transaction."

RBS is selling businesses designated as non-core in select markets to raise funds. In India, it is present through 31 branches and has 10,000 employees through the acquisition of the Asian operations of ABN Amro Bank NV in 2007. The acquisition was through a consortium, along with Fortis group of the UK and Banco Santander SA of Spain.

In February, RBS declared that it would move its India retail and commercial banking operations, which employs 2,500 people, into a for-sale, non-core division.

Impairments in the Asia retail and commercial banking increased by 44% to £171 million (Rs1,301.31 crore now), reflecting an increase in provisioning levels across a number of consumer finance markets in the region, the bank had in a statement that month.

The Wall Street Journal on Wednesday reported that Hongkong and Shanghai Banking Corp. (HSBC) has also not submitted a bid. Mint could not independently confirm the development. The HSBC spokesperson could not be reached for comment.

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Published: 27 May 2009, 09:43 PM IST
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