Private lender IndusInd Bank Ltd is buying Royal Bank of Scotland’s (RBS) diamond and jewellery financing business in India and related deposit portfolio for an undisclosed amount, it said on Friday.
RBS’ India diamond and jewellery financing loan book size is around Rs 4,500 crore ($721.7 million), IndusInd Bank said.
The Indian bank has also signed an agreement with ABN Amro Bank NV for cooperation in diamond and jewellery financing business. ABN Amro is owned by RBS.
Several members of IndusInd Bank’s senior management had been associated with this portfolio in RBS and prior to that in ABN Amro.
The deal is subject to regulatory approvals, and until ownership of the loans transfer to IndusInd Bank, RBS will continue to manage the loan portfolio.
“This acquisition fits nicely in our strategy of creating scale with profitability in select business segments. We like this business and have a deep insight into the industry,” Romesh Sobti, managing director and CEO of IndusInd Bank, said.
Recently, RBS said that it is planning to shut down its banking operations in the country but will be retaining the back office.
The balance sheet exposure of the company to its India business also almost halved in calendar year 2014, as its net balance sheet exposure of Indian operation declined by £1.7 billion to £2 billion at the end of December 2014.
In May 2013, RBS had said that it has begun the process to consolidate its retail and commercial banking business in India.
RBS’s Indian banking operations mainly include investment and wholesale banking; it also has presence in wealth management and retail segments.
(Edited by Joby Puthuparampil Johnson)