RBS Sell-Off Continues As Two Deals Are Concluded

Sector: Banking & Finance

14th July 2010

Royal Bank of Scotland sold its retail and commercial banking business in India to rival HSBC for $95 million (£62.5 million) yesterday as it also completed the previously-announced $1.6bn (£1.1bn) sale of its metals, oil and European energy business, RBS Sempra, to JP Morgan.The deals were seen by the City as further progress in RBS chief executive Stephen Hester's three-to-five-year quest to rid the Scottish bank of its non-core businesses and return it to profitability again.Of the latest Indian deal, Bruce Van Saun, RBS's chief financial officer, said: "We have made excellent progress in recent months with our disposal of non-core assets, resulting in over 20 businesses sold so far I am delighted that our retail and commercial banking colleagues and customers in India will now become part of HSBC, one of the largest and most successful banking groups globally."
The Indian business being sold has assets of £1.2bn, 1.1 million customers, 1,800 staff and 31 branches. The deal, subject to regulatory approvals, is due to be completed in the first half of 2011.
Speaking in New Delhi, Michael Geoghegan, HSBC's group chief executive, who relocated to Hong Kong this year to reflect the rise of Asian economic power, said: "The main focus of our strategy is on emerging markets and this acquisition is our third transaction in one of the world's largest and fastest growing developing markets in the past two years."
Naina Lal Kidwai, HSBC group general manager and country head in India, said: "India is home to about 1.15 billion people, representing 17 per cent of the world's population. We see tremendous growth potential in this country."
RBS said following the accompanying European commodities business sale completion yesterday its RBS Sempra Commodities had a sales process underway for its remaining North American Power and Gas, and Sempra Energy Solutions business lines.
RBS also announced yesterday that Cormac McCarthy is stepping down after ten years as chief executive of the bank's Ulster Bank subsidiary. McCarthy said he felt now was the time to "seek new opportunities".has signalled his intention for the majority taxpayer-controlled bank to move out of a number of businesses and geographies to help restore its fortunes.

Source: Times - Read the full article >