New Delhi: Barclays bank has confirmed that it is in talks to buy ABN AMRO, the biggest Dutch bank, in what would be the world's largest financial-services acquisition. Barclays is expected to clarify its position on Tuesday.
A Barclays-ABN merger would create a bank with 47 million customers and 220,000 staff worldwide. It also may prompt other bids for ABN and Barclays itself.
It was earlier known as a diamond financing bank, but after being in India for 81 years, ABN AMRO has spread its reach far and wide, from commercial, retail, investent banking and even to the asset management business. ABN AMRO's India operations will be an attarctive target for any European bank, be it Barclays, BNP Paribas or Societe Generale, given RBI's tight fisted policy in sanctioning new branches
ABN's Indian assets are estimated to be over Rs 23,500 crore, which have grown over 52 per cent in 2005, which makes it the fourth largest foreign bank in India. Its buyers, on the other hand, don't even come close, BNP ranks seventh in the pecking order, while Barclays comes at 13 and Societe Generale ranks even lower 15.
The most lucrative part of the deal for potential buyers will be to add Rs 11,863 crore worth of ABN's deposits as the potential buyers barely currnetly have not even 3 per cent of ABN's deposit base. Also, ABN has 23 branches in India and since branch licenses are hard to come by, any suitor would want to grab these branches, especially given that India is one of the fastest growing markets for retail banking.
Also the business which Barclays, BNP Paribas and Societe Generale would like most to get their hands on, would be ABN's asset management business, which it launched in India in 2004 and its wealth management business. All the three suitors have already announced big plans for wealth management and private banking in India. In the 90s, ABN also bought out Bank of America's retail operations in India, which has helped it grow its consumer banking business.
Excerpts from moneycontrol.com
Comments
0 comment