RBS India sale of retail unit to HSBC falls through as deadline ends
30 November 2012
Royal Bank of Scotland's (RBS) proposed sale of its retail and commercial banking operations in India to Hongkong and Shanghai Banking Corporation Ltd (HSBC) failed to materialise as the conditions for the sale were not met even after the deadline expired today.
RBS had, in July 2010, agreed to sell its 31 branches, which had revenues of 42 million pounds and a customer base of 400,000, to HSBC by end of November this year (2012).
''The agreement for the acquisition by The Hongkong and Shanghai Banking Corporation Ltd of The Royal Bank of Scotland Group plc's Indian retail and commercial banking businesses has expired as the long stop date of November 30, 2012, has been reached without all conditions required to close the transaction being satisfied,'' HSBC said today.
Neither RBS nor HSBC offered to specify the reasons for the breakdown and explained it away as a failure to complete all the details by 30 November, the deadline for resolving all issues related to data and customer transfers and regulatory approvals.
Obviously, the two parties have failed to meet regulatory norms for branch ownership by foreign banks.
RBS's proposal last month to sell of 316 branches to Spanish bank Santander for $2.7 billion also failed to materialise, after more than two years of talks, as the issue got stuck on IT issues.