NBAD buys Indian corporate loan portfolio of Royal Bank of Scotland

The bank will focus on corporate clients in India, a year-and-a-half after being granted a licence, the first for a UAE lender in the fast-growing South Asian nation in 34 years.

National Bank of Abu Dhabi, the UAE’s biggest bank by assets, has bought the offshore Indian corporate loan portfolio of the Edinburgh-based lender Royal Bank of Scotland (RBS) for US$900 million.

The announcement, made to the Abu Dhabi stock exchange, comes ahead of the bank’s official launch of its operation in India on Monday as it seeks to expand its reach in emerging markets.

It did not give any other details about the acquisition.

The bank will focus on corporate clients in India, 18 months after being granted a licence – the first for a UAE lender in the fast-growing South Asian nation in 34 years – Alex Thursby, the chief executive, said last week.

India’s outlook was given a shot in the arm last year after Narendra Modi, the country’s reform-minded prime minister, took office.

Mr Modi lost little time in his bid to overhaul the country’s economy, the third-biggest in Asia. As well as moving towards market-based energy pricing by removing energy subsidies, Mr Modi is also getting ready to pass a goods-and-services tax, to open up more to foreign investment as well as to better target subsidies for fertilizers, cooking gas and food towards those that need them most.

India is central to NBAD's bigger plan as the bank has been betting that its growth will be fuelled, in part, by what it calls the West-East corridor that spans fast-growing emerging markets such as China, India and Egypt.

Shortly after he was appointed as chief executive in 2013, Mr Thursby said that NBAD planned to build eight hubs in a West-East geographical corridor of emerging markets spanning cities such as Mumbai to tap intercontinental trade flows valued at US$137 billion. He said that since then he had grown the bank’s international business with income coming from outside the lender’s operations in the UAE now accounting for more than 20 per cent of total revenue.

Meanwhile, RBS, the UK’s largest taxpayer-owned lender, has been exiting its corporate loans and debt capital markets business in the Middle East and Africa this year as part of a move to make the bank smaller. The bank also sold its retail banking business to Abu Dhabi Commercial Bank in 2010.

RBS’ loss at its investment bank almost doubled in the third quarter, the bank said last month. Chief executive Ross McEwan is dismantling the division and scaling back trading businesses amid lingering costs for litigation.

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