HSBC has agreed to acquire Royal Bank of
Scotland’s (RBS) Indian retail and commercial division to boost its
presence in the world’s second fastest growing economy.
The bank said it will pay up to $95m for the
businesses, which have a gross asset value of $1.8bn as at 31
March.
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The bank also said it will apply to the
Reserve Bank of India for branch licences to support the
acquisition.
HSBC’s move into India supports an ongoing
expansion plan into the country and the wider emerging market.
In June 2008, HSBC entered into a joint
venture with India’s Canara Bank and Oriental Bank of Commerce,
gaining access to a distribution network of 5,000 branches and 50m
customers.
In contrast, RBS has been forced to retreat
from overseas markets in an effort to refocus on its key
strengths.
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By GlobalData“This transaction is an important addition to
our existing network and testament to our ambition to expand our
footprint in India. We see tremendous growth potential in this
country, both in helping domestic and international companies
capture opportunities in India’s growing trade and investment flows
with the world and in meeting the financial needs of its rising
affluent consumer market,” said Naina Lal Kidwai, HSBC group
general manager and country head in India.
HSBC will take over RBS’s 1.1m customer
relationships and 31 branches across India.
The acquisition, which is subject to
regulatory approvals, is expected to be completed in the first half
of 2011.
