London/Mumbai : HSBC Holdings said it would buy the Indian retail and commercial banking businesses of Royal Bank of Scotland (RBS) as the part-nationalised UK bank continues its retreat from overseas markets.
HSBC said it would pay a premium of up to $95 million (Dh348.8 million) over the tangible net asset value of the businesses when the deal is completed, probably in the first half of next year.
The price will be reduced if bad debts in the business increase during the next two years. The deal could end up being neutral or even costing RBS, as the TNAV could be near neutral or negative and a deterioration in bad debts in the next two years could wipe out the premium.
"Our commitment to our wholesale and investment banking, transaction services and private banking businesses in India remains unchanged," said Madan Menon, RBS' India head of global banking and markets.
HSBC is buying operations from RBS with 1.1 million customers, over 1,800 staff and 31 branches. The portfolios had a gross asset value of $1.8 billion at the end of March. HSBC currently has about 2 million customers and 50 branches across 29 cities in India.
