On Friday HSBC purchased the Royal Bank of Scotland’s retail and commercial banking business in India for £62.5 million. this followed a previous sale of its metals, oil and European energy business, RBS Sempra, to JP Morgan for £1.1 billion.
The sell offs are part of the long term economic plan by RBS Chief Executive, Stephen Hester. The three-to-five year plan is to sell non-core businesses and return RBS to a level of profitability. After a 2008 loss of £24.3 billion and a £3.6 billion loss last year in 2009, Hester has focused on his plan of disposing of non-core assets and businesses to improve the RBS balance sheet.
“We have made excellent progress in recent months with our disposal of non-core assets, resulting in over 20 businesses sold so far” said RBS Chief Financial Officer, Bruce Van Saun.
“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 deal is due to be completed sometime in the first half of the year of 2011. The bank sale to HSBC involves assets of £1.2 billion, 1.1 million customers, 1,800 staff and 31 bank branches.
HSBC is please with the purchase in India. The Group’s General Manager and country head in India, Naina Lal Kidwai, 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 completed a sale this past week of its remaining North American Power and Gas, and Sempra Energy Soultions business lines.