The portfolio will be managed by RBS until ownership of the loans is transferred to IndusInd. Photo: Mint
Mumbai: IndusInd Bank Ltd will buy the diamond and jewellery financing business of Royal bank of Scotland (RBS) in India, which has a loan book worth some Rs.4,500 crore, IndusInd said in a statement on Friday.
The deal is subject to regulatory approvals. The portfolio will be managed by RBS until ownership of the loans is transferred to IndusInd.
IndusInd specializes in diamond and jewellery financing and this acquisition will enhance its position, said the bank.
"This acquisition fits nicely into our strategy of creating scale with profitability in select business segments," IndusInd Bank chief executive Romesh Sobti said in the statement. "We like this business and have a deep insight into the industry."
RBS' diamond and jewellery is a legacy of the erstwhile ABN Amro Bank NV, the Dutch bank bought by a consortium of three lenders led by RBS in 2008. The Indian operations were taken over by RBS. IndusInd's senior management including managing director and chief executive officer Romesh Sobti were part of the undivided ABN Amro.
This also played a part in the acquisition, IndusInd said.
ABN Amro was restarted by the Dutch government in 2010 and had applied for a banking license in India. However, since permission was not given, the Dutch lender did its banking operations through RBS. ABN will now use IndusInd's network for this busines.
This is also the first business being offloaded by RBS in India, which has started winding down operations across a number of locations.
On 25 February, RBS said it would shut operations in India and 24 other countries as a way to cut costs and improve returns to shareholders. The bank's businesses in India will be wound down or put up for sale, Mint reported on 26 February.
At 11.35am, Indusind Bank Ltd was trading at Rs.944.45 on the BSE, up 0.15%, while India's benchmark Sensex fell 0.3% to 28,802.57 points. In the quarter ended December, Indusind has total advances at Rs.63,847 crore, up 22% from a year ago.
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