Chillin' out till it needs to be funded
After ANZ bought RBS Asia assets for $550 m (A$ 600 m now 🙂 ) minus India China and Malaysia and Stanchart failed to make the grade, HSBC got into the act as usual. With both the birds wounded in pursuing RBI, HSBC is furthering the notion that it does well in emerging markets like India and China with its own application with RBI to allow it to take over RBS India or the much vaunted ABN AMRO team of 10000 in India. These 30+ branches wil definitely give it more muscle. HSBC fell in morning trade in Hongkong. RBI had earlier denied HSBC in a parley to get more than 15% with control in Axis Bank, currently led ably by Shikha Sharma of ICICI Prudential ramp up. With two banks already in the $25 billion ( ~ INR 1 Trillion ) league, and the extensive branch network of Stanchart in Mumbai and Kolkata, HSBC has a long way to go. Even on this deal RBI has earlier refused to recognize a portfolio sale and suggested a bank buyout for it to step in and allow name changes and change of business owners.
Livemint probably has some of the facts right below, but whether Naina Kidwai is able to make the right concessions to the nation’s bank regulator is to be seen:
HSBC entered the bidding race for select Asian assets of RBS in October after talks between Standard Chartered Bank Plc and RBS broke down over differences on the valuation of assets.
According to an RBS official in India, both the banks have already signed the deal and the actual acquisition depends on regulatory approvals in three countries.
RBS has already approached the Indian central bank for approval. The key to the success of the Indian part of the acquisition is the Reserve Bank of India (RBI) clearance for transfer of RBS branch licences to HSBC.
RBS has 31 branches in India and employs 10,000 people, following its 2007 acquisition of the Asian operations of ABN Amro Bank NV. ABN Amro continues to conduct business in India under its original name despite the RBS takeover. That acquisition was made through a consortium, along with Fortis group of the UK and Banco Santander SA of Spain. HSBC, which had an asset base of Rs94,620 crore in March, operates through 47 branches across India. It has three more branch licences granted by RBI.
Citibank NA is the largest foreign bank in India with an asset base of Rs1.05 trillion in March, followed by Standard Chartered Bank with Rs97,492 crore.