Twitter
Advertisement

RBS may sell Indian private banking arm to Sanctum Wealth

On Monday, IndusInd Bank acquired the bank's diamond and jewellery arm amid speculation that the Switzerland-based firm is planning to exit the country after its parent company went into a government bailout after the 2008 credit debt crisis.

Latest News
article-main
Royal Bank of Scotland
FacebookTwitterWhatsappLinkedin

Royal Bank of Scotland Group Plc is in talks to sell its Indian private banking business to Sanctum Wealth Management, a firm set up by its local private banking business head Shiv Gupta, a spokeswoman for the bank said on Monday.

Switzerland's Union Bancaire Privee said in March that it was buying the overseas business of British wealth manager Coutts from RBS, as part of the bank's drive to pull back from foreign markets and focus on UK retail and commercial banking.

RBS' India private banking business was not part of that deal.

On Monday, IndusInd Bank acquired the bank's diamond and jewellery arm amid speculation that the latter was planning to exit the country after its parent company went into a government bailout after the 2008 credit debt crisis. 

RBS has signed a non-binding framework agreement and is now in discussions to sell the Indian private banking unit to Sanctum Wealth, the spokeswoman said in an e-mailed statement, without giving details.

"This marks another step towards delivering the strategy to make RBS a stronger, simpler, more sustainable business, more aligned with the needs of our customers in the U K and Western Europe," the statement said.

A source with knowledge of the transaction with Sanctum said RBS India private banking managing director Gupta could rope in some private investors in Sanctum Wealth after the transaction was completed.

In India, RBS competes with global banks including Barclays Plc, Citigroup Inc, Standard Chartered Plc as well as a host of domestic financial firms in the wealth management business.

Many foreign wealth managers had scrambled to open up shop in India a few years back and aggressively ramped up operations to take advantage of robust economic growth, only to find themselves struggling.

Although Asia's third-largest economy has been minting millionaires at a strong pace, it has failed to translate into profits for the banks that have set up teams of well-paid bankers to help manage those riches.

Cut-throat competition, high staff costs and weak markets are squeezing revenue of the top private banks, while growth opportunities are limited by regulations that restrict product offerings.

Faced with these challenges, Morgan Stanley in 2013 decided to sell its India wealth management unit to Standard Chartered, after entering the fiercely competitive market about four years ago.

Some industry executives, however, say that the long-term prospects of the private banking business in India remains attractive, as a pickup in the country's economic growth is expected to boost the number of high net-worth individuals.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement