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ABN Amro on the prowl

BS Banking Bureau

ABN Amro Bank, which two years back had picked up the retail assets of Bank of America in India, is now planning to acquire stake in a private sector bank in Bombay.

"The relaxation in FDI norms has rekindled the interest of foreign banks (in local banks). We plan to acquire 49 per cent, so as to have management control over the bank," said ABN Amro Bank executive vice-president and chief executive (India), Ramesh Sobti.

ABN Amro is the first foreign bank to announce its intention to acquire a local player after the government relaxed FDI norms last week. "We are looking at both new and old private sector banks," Sobti said. However, he refused to identify the bank ABN Amro is zeroing in on.

"We are waiting to get a clear picture of the regulatory norms. If money can be brought through private equity funds, foreign banks will have no problem in acquiring a stake in local players," said Sobti.

According to present RBI rules, foreign banks in India cannot take a stake in another bank. ABN Amro is waiting for changes in these norms before acquisition talks with any bank takes off.

"We are looking at three growth corridors in the country-the western belt covering Bombay, Baroda; the southern belt of Madras, Bangalore and the northern belt of Delhi, Chandigarh, Ludhiana." ABN Amro is looking at banks, which are present in at least two of these growth corridors.

Sobti said that "acquisitions will be painful," but advantages will arise from cost management. Foreign banks will have to concentrate on productivity, costs and distribution.

"As old private sector banks do not have large employee strength, if productivity is increased by 15-20 per cent, this will take care of the higher employment in the bank," he added.

"We are growing in India. ABN Amro is the only foreign bank on a recruitment spree. We are recruiting around 280 people for our branch banking, preferred banking and also credit cards. The bank has just opened a new branch in Hyderabad and two new branches in Lucknow and Ludhiana are also planned," he said.

The bank will also set up a national call centre and a processing centre," he said.

The bank is also looking at picking up the portfolios of NBFCs for auto loans, personal loans and loans against equity. "We will pick up portfolios depending on the cleanliness of loan and also should match our. We are looking at the salaried class and professional class."

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