Thursday, January 22, 2009

RBS Group launched financial services in India

The Royal Bank of Scotland Group Plc., or RBS, after receiving approval from the Reserve Bank of India of renaming of ABN AMRO Bank NV’s non-banking finance arm as Royal Wealth function under RBS Management has launched its wealth management business in India. The wealth management business wills Financial Services.

In October 2007 RBS, the UK’s Fortis Group and Spain’s Banco Santander SA had acquired the global assets of Dutch lender ABN AMRO Holdings NV. In India, Fortis will run ABN AMRO’s asset management unit and RBS will take hold of the wholesale, retail and private banking businesses.

An ABN AMRO Bank official notified, “RBS Financial Services is planning to set up five centers across the country, of which two centers are in Mumbai. The non-banking finance arm will act as a distribution arm of the bank”. He added, “Apart from distributing wealth management products, RBS Financial Services will also sell other asset products and...enter the business of collection of non-performing assets.”

An anonymous official who was not bank’s official spokesperson told Royal Wealth Management will be launching and also be marketing in India the services and products of RBS Coutts, RBS’ global private banking arm.

On August Mint had reported that the Reserve Bank of India (RBI) had rejected RBS operating ABN AMRO’s Indian business under two separate entities: RBS and RBS Coutts. An official had then pointed out, “Coutts is a separate entity and approval. RBI for use of the brand name would effectively mean allowing a backdoor entry for a bank.”

In October former AMRO’s non-banking finance arm, ABN AMRO Securities (India) Pvt. Ltd had received the Foreign Investment Promotion Board’s consent to expand its scope of activity from a primary dealership. And in December, RBI transferred the primary dealership license—which allow a firm to trade in government securities—to ABN AMRO Bank.

V. Vasantha Kumar, senior vice-president and head of marketing and communications for ABN AMRO Bank in India, informed in an email “As part of our expansion plans we are looking at distribution of wealth products under the brand name of Royal Wealth Management and currently we have two outlets in Mumbai”. “Further details on our expansion plans will be announced shortly, once they are finalized.”

ABN AMRO was established in 1920 in India since then it has 9,000 employees in 28 branches. The lender’s resources in India have grown by 28% to Rs36,617 crore in fiscal 2008, while its net profit declined 27% to Rs280.6 crore.

On Monday, ABN AMRO reported that it will post a full-year loss from continuing operations of about €13 billion (Rs84,240) after investment-banking losses.

On the other hand RBS, which bought ABN AMRO’s investment banking business, informed it might post a loss of as much as much£28 billion (Rs2.02 trillion).

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