Royal Bank of Scotland Group Plc said it is selling its Indian private banking unit to a company led by the head of the business, Shiv Gupta, as the British bank pulls back from some foreign markets to focus on UK retail and commercial banking.
Gupta`s company Sanctum Wealth Management will take over the RBS private banking unit`s onshore clients and staff, the bank said in a statement on Thursday. Sanctum plans to retain all branch networks currently operated by RBS private banking in India, it said.
RBS did not give financial details of the deal.
The bank announced the sale of overseas business of British wealth manager Coutts to Switzerland`s Union Bancaire Privee in March. The India private banking business was not part of that deal.
The transfer of the business to Sanctum is expected to be completed by the end of first quarter next year after getting the regulatory approvals, RBS said.
Many foreign wealth managers had scrambled to open up shop in India a few years ago and aggressively ramped up operations to take advantage of robust economic growth, only to find themselves struggling.
Although Asia`s third-largest economy has been minting millionaires at a strong pace, it has failed to translate into profits for the foreign wealth managers that have set up teams of well-paid bankers to help manage those riches.
Cut-throat competition, high staff costs and weak markets are squeezing revenue of the top private banks, while growth opportunities are limited by regulations that restrict product offerings.