Mid-sized private lender Ratnakar Bank, on Friday, said it had acquired British banking major RBS’ business banking, credit cards and mortgage portfolio for an undisclosed sum.
The deal comprises transfer of 1.20 lakh customers but the asset base involved was not immediately known. All of RBS employees will be retained.
“(We have) agreed to acquire RBS’ business banking business, credit cards business and mortgage portfolio in India, subject to approvals from the Competition Commission of India,” a statement from the unlisted bank, founded in 1943, said.
“Employees of RBS associated with these businesses are proposed to be absorbed by Ratnakar Bank,” it added.
The bank’s head of strategy and markets, Rajeev Ahuja, said RBS had built a high-quality business rich in current accounts and added that the transaction would help the lender fast track growth.
The Kolhapur, Maharashtra-headquartered bank has a customer base of five lakh with a book of Rs.14,500 crore.
RBS has already announced plans of reducing its footprint in the country and has already stated that it will be holding only 10 of its branches in the country by the end of 2013, down from a peak of 31.
In the statement, RBS said the sale was in line with its plans. “The deal comprises over 1.20 lakh customers. RBS is fully committed to support impacted customers and will be writing to inform on the next steps for them.”
The British lender maintained that the deal would have no impact on its corporate and institutional business (markets and international banking) or private banking businesses.
RBS had struck a deal to sell its retail and commercial banking businesses to its peer HSBC, but the pact fell as it was not cleared by the Reserve Bank of India.
Ratnakar Bank said the transaction complemented its existing business and would help it strengthen base in the targeted product and customer segments.
The deal would also enhance the private lender’s low-cost current and savings account deposits in a “in a very short span of time”, the statement said.
Ratnakar Bank completed a second round of equity capital raising worth Rs.324 crore from global and domestic investors by issuing three crore new shares in April, taking the total infusion over the last two years to over Rs.1,100 crore.