Search the Internet          Tips  Sites: Finance, Investment

ABN-AMRO Bank looks for acquisitions in India

Fakir Chand , in Bangalore

ABN-AMRO Bank, one of the world's largest banks, with total assets of over $500 billion and presence in about 70 countries, has set its eyes on India for strategic acquisitions of Indian banks to consolidate its presence and expand business in the sub-continent.

Though the Dutch bank has been operating from India over the past 8 decades, it is only during the last four-five years that it has been on an expansion binge after securing permission from the Reserve Bank of India to open more of its branches, with the latest in Bangalore.

"As part of our global acquisition strategy, we have started negotiations with some of the banks in India to acquire majority stake for management control. Keeping in view the regulations and the RBI norms, we have short-listed a few of them for acquisition in about a year's time," ABN-AMRO Bank's senior executive vice-president Jan Peter Schmittmann told rediff.com in Bangalore on Thursday.

Schmittmann, however, declined to name the banks that have been targeted for acquisition though he hinted that they were in the private and the public sector.

"The existing Indian regulations do not permit foreign banks to have more than 49 per cent equity stake in Indian banks. We have to do a lot of due diligence before we can finalise such deals even if we are to have a controlling stake for ourselves," he added.

Asked whether the bank had earmarked funds for acquisitions in the Indian sub-continent, Schmittmann said funds were not a problem as the bank had enough cash reserves. "The proposed acquisitions are not for the sake of acquisition, but to expand our activities in a developing country like India. Our perception is that with over 1 billion people, the potential for banking penetration in India is immense. With the opening up of the insurance and other financial products, bankassurance business is set to expand dramatically," he stated.

Referring to the bank's acquisition plans in Asia, Schmittmann said ABN-AMRO had already acquired a couple of them in Taiwan and Hong Kong during the last couple of years. "We are also looking at China in the long term as banking regulations in that country do not permit majority stake for foreign banks," he affirmed.

Even as it scouts for potential acquisitions, ABN-AMRO is going ahead with its branch expansion spree.

According to its India CEO Romesh Sobti, the bank will have a 30-branch network in India by 2005, with its presence moving to major cities that double up as commercial hubs.

"We have already applied to the RBI for four more licenses to open our branches in non-metro cities. By this year-end, another branch will be opened at Ludhiana, and the RBI license for a branch in Lucknow will be moved to Noida on the outskirts of Delhi," Sobti disclosed.

Besides entering into collaborations with Royal Sundaram and Dabur-CGU for marketing life and non-life insurance products across the country, ABN-AMRO Bank will be launching its credit card operations in India by March 2002. The bank has already tied up with MasterCard for offering its clientele credit to debit cards.

Earlier, launching its Bangalore branch, Schmittmann said though ABN- AMRO was behind other foreign banks in setting shop in the hi-tech capital of India, it would be the first branch in the world to have an exclusive Internet banking from its 'Banking Café' and a preferred banking counter to enable high-end corporate or consumer customers to get personalised attention and preferential treatment.

"We are taking up the preferred banking as a value-added service on a pilot basis. It will be a case study to be taken up in other branches across India, Asia, and gradually in Europe and the US. Apart from providing world class banking services throughout the year on all the 365 days from 1000 IST to 1900 IST, the bank will offer a host of services to its consumers or retail customers such as delivery of cash of up to Rs 25,000 at no extra cost," Sobti asserted.

Positioning itself as a full service bank offering the entire gamut of services spanning consumer banking and wholesale banking, ABN-AMRO offers corporate banking, structured finance, transaction banking, debt underwriting and distribution, brokering, corporate finance, investment banking, and fleet management services.

"We have around 15-20 corporate accounts, including a couple of them which are multinational and MNCs. Though they were being serviced hitherto from our Madras branch, they will be getting hereafter direct and efficient attention from the Bangalore branch," claimed branch chief manager Sandeep Sareen.
Money
Business News

Tell us what you think of this report