Royal Bank of Scotland (RBS) is no longer selling its Indian retail and commercial banking operations to HSBC. Instead, it will be winding down what was a profitable business.
RBS agreed to sell the business to HSBC in July 2010, but the deal lapsed on Friday November 30th. The Indian operations are profitable and in the nine-month period to September 30th generated revenue of £42m.
In a statement RBS said: "Consistent with RBS's strategic objective to reduce or exit its non-core assets and businesses, it will begin to wind-down its retail and commercial banking business in India, whilst meeting all customer obligations."
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The Indian business operates from 31 branches and serves 400,000 customers. With total assets of £190m it accounts for only around 0.5% of the group's remaining non-core assets (£65bn).
On Thursday, Bank of England Governor Mervyn King signalled that UK banks may need to build up the capital they hold against potential losses.
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