RBS could franchise ABN Romania

“The ABN Amro deal creates some very attractive options for growing our international retail franchise in new markets in Europe, for example Romania where ABN Amro has a strong presence,” according to an exclusive declaration to Business Standard by RBS spokesperson, Linda Harper.

The Transition Plan regarding the division of ABN Amro among members of a Consortium made up of RBS, Fortis and Santander is due to be finalized and submitted to the Dutch National Bank (DNB) by tomorrow, 11 December, but will not be made public, according to RBS representatives. This means that the fate of ABN Amro Romania is unlikely to be clarified this year. Some analysts are even expecting RBS to forego operations on the Romanian market. When Royal Bank of Scotland took over Business Unit Europe, it also acquired the Romanian retail division of the Dutch bank. This results in the entry onto the Romanian market of the United Kingdom’s second-largest bank and one of the most powerful international banks. However, it is unclear how long the bank will remain on this market.

“We believe that RBS will not continue the operations in Romania, because of the small size of the business, and also because RBS has bigger issues at the moment – the integration of ABN Amro, of course, but of the bigger businesses, and the credit problems related to the US mortgage crisis,” said Paul Beijsens, Equity analyst with Theodoor Gilissen Private Bankers (TGB).

Royal Bank of Scotland was principally interested in taking over ABN Amro’s Asian and North American business (where it unfortunately lost La Salle), as well as the Global Banking division, which serves over 500 multinationals globally. “RBS has not yet evaluated the savings that will result from the integration of retail banking operations, because the group was primarily interested in banking services for corporations, namely services being offered to multinationals by ABN’s Global Banking division,” according to a declaration two months ago by the British group’s spokesperson. Furthermore, the Edinburgh-based bank has no activities in Central and Eastern Europe. On the other hand, the Romanian market “is attractive to Western institutions due to its growth prospect and higher margins,” said Standard & Poor’s analyst, Magar Kouyoumdjian.

“Due to the high level of market growth it is likely that RBS will not forego activities in Romania, at least in the medium-term,” according to NCB Stockbrokers of London analyst, Simon Willis.