You are here
RBS scraps sale process for US$2.8b Indian banking business
[MUMBAI] Royal Bank of Scotland Group Plc, Britain's largest government-owned lender, has scrapped a sale process for its onshore Indian banking operations.
The Edinburgh-based bank "concluded that it is not feasible to sell the business in its entirety," it said in an e-mailed statement on Wednesday in response to Bloomberg queries.
RBS will now consider other options, which may include winding down the remaining Indian operations or selling individual parts of the business, according to the statement.
Most of the bank's roughly 600 employees in the South Asian nation would lose their jobs by the end of the year as the local operations are wound down, a person with knowledge of the matter said, asking not to be identified as the information is private.
Since taking over more than two years ago, Chief Executive Officer Ross McEwan has sold or exited businesses around the globe, including RBS's offshore Indian loan portfolio and its private banking business in the country.
The UK lender had a local balance sheet of 190 billion rupees (S$4 billion) and a loan book of 112 billion rupees in India at the end of March 2015, according to financial statements posted on its website.
RBS suspended an auction for the Indian business after receiving final offers in December, people with knowledge of the matter said. Bidders couldn't agree with RBS on some conditions, including requirements to take on employee pension liabilities and fulfill certain guarantees the bank offered to clients, one of the people said.
The bank has informed the local regulators of its approach, according to Wednesday's statement.
Employees in India "will be treated fairly," in line with the lender's global policies and local practices, and will be given clarity on their positions "over the coming weeks," RBS said.
DBS Group Holdings Ltd, Southeast Asia's largest bank, and IDFC Bank Ltd. were among suitors preparing final bids for RBS's Indian banking business under the previous sale plan, people familiar with the matter said in December. Representatives for DBS and IDFC Bank declined to comment.