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26 February 2024

RBS evaluates winding down India units; 500 jobs on stake

By Reuters

Royal Bank of Scotland Group has decided to call off a planned sale of its India banking business and will instead look at options including winding it down, the lender said on Thursday.

Singapore’s biggest lender DBS Group Holdings and South African banking group FirstRand were in separate talks to buy RBS's India unit, sources with direct knowledge of the matter had told Reuters in October.

The India banking business sale process was a part of RBS' move to shrink its banking operations globally, pulling out of about 25 countries to help it refocus on lending in Britain.

"After examining a number of potential sale options for our banking business in India, we have concluded that it is not feasible to sell the business in its entirety," RBS said in a statement.

"We will now look at other options which may include a wind down or sale of individual parts of the business, and we will communicate to clients accordingly," it said, adding the bank's back-office outsourcing unit will continue operations in India.

The India operations of the RBS banking business comprise corporate and institutional banking, trade finance and cash management.

RBS said the bank would give its more than 500 staff in the banking business "clarity on their position" over the next few weeks. It said the bank had informed the Indian regulators about the developments.

DBS declined to comment. A Mumbai-based representative for FirstRand did not immediately respond to a Reuters request for comment on RBS scrapping the India banking unit sale.

RBS's balance sheet exposure in India nearly halved in 2014 to £2 billion ($2.9bn) due to a drop in corporate lending, particularly in the oil and gas and mining and metals sectors, as per its annual report.

As part of its strategy to pull back from some foreign markets, RBS has been paring its presence in India in the recent past and in September announced the sale of its private banking unit.