ANZ Only Bidder Remaining For RBS Asian Assets

Post by Sharat on May 28, 2009 · Under Business News, Capital Markets, Company News, Equities, International Business News, Mergers & Acquistions, banking · Comment

Key contenders in the sale of British banking giant RBS’s Asian assets have not put forward any bids for the businesses that were put up for sale, leaving Australian retail banking major ANZ firmly in the driver’s seat.

The Reuters news agency yesterday reported that neither HSBC nor Standard Chartered had submitted any bids by the close of business Wednesday. Sources ultimately confirmed that Standard Chartered was not particularly keen on the terms of sale, but that the lender may revive its bid should RBS revise its terms of sale. HSBC did not comment on its effective withdrawal from the bidding process.

India’s Economic Times, reported that the assets themselves were simply not attractive enough to the prospective bidders, quoting unnamed sources at one of the bidding banks as saying

“The assets on sale are loss making. Post-acquisition, the bank will have to spend money on the integration, which would make the deal costly,” said a senior official in one of the banks, bidding for the deal.

ANZ on Wednesday raised around A$2.5 billion through an institutional share placement, to finance any potential acquisition. The Australian banking major is also offering its retail investors the chance to participate in the capital raising through a share purchase plan,

The Economic Times speculated that the Indian assets are of least interest to ANZ with the lender more interested in a portfolio of assets located in Singapore, Hong Kong and Indonesia.

Curiously ANZ exited India at the start of the decade, selling its venerable ANZ Grindlays franchise in that country onto Standard Chartered. Replicating that franchise now is going to cost it far more money than it sold it for, nevertheless India is an important banking market for international banks, and the purchase of RBS’s Indian operations would give it a branch banking network in that country in a fell swoop.

When contacted, an RBS spokesperson said: “We are well advanced with the sale process, however, due to the confidentiality of the process, we will not be commenting on any individual bidders or elements of the transaction process until the completion of any agreement.”

None of the other banks were able to provide comment on the transaction.

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