from the ground Up

by Jessica Cheam, The Straits Times, September 16 2008

THE blue and white colours of Britain’s Royal Bank of Scotland (RBS) are about to become a familiar sight in Singapore as the bank embarks on an aggressive expansion in Asia.
They replace the familiar green and yellow of Singapore’s oldest existing bank – the 150-year-old ABN Amro – which was officially rebranded as RBS yesterday.
RBS said yesterday that it received Qualifying Full Bank (QFB) status from the Monetary Authority of Singapore two weeks ago, taking over ABN Amro’s licence. This enables it to set up its own branches and automated teller machines (ATM) in Singapore.
RBS will start off in the local market by opening two more wealth management centres by next year-end and boosting its front-line staff in this area by as much as 25 per cent, said its head of retail banking, Mr Ajay Mathur.
Its wealth management centres, formerly known as Van Gogh Preferred Banking, will be rebranded as Royal Preferred Banking.
The bank will also extend its reach into the heartland via an existing ABN Amro partnership with SingPost, which will see its products such as PostLine, a new personal line of credit, available at SingPost’s 62 post offices. Customers will be able to receive professional financial advice from sales executives stationed at these outlets.
“We see opportunities in the credit-card and loans market so we’ll continue to be in this consumer finance space,” said Mr Mathur.
RBS also said yesterday that Singapore will be playing a bigger role in its operations, acting as a base for almost all of RBS’ operations in Asia. It will be the global hub for RBS’ group operations and control and RBS Coutts; and regional hub for global transaction services, manufacturing and corporate credit risk management.
Singapore will be the main regional office for commodities joint venture RBS Sempra Commodities in the Asia-Pacific. The group’s regional head of manufacturing, G11 Spot FX Traders, Global Financial Institution FX Traders, along with the respective regional heads, have been relocated to Singapore from Hong Kong.
It now has a combined workforce of 2,400 here, said Mr Muhammad Aurangzeb, RBS’ country executive of Singapore and head of global banking and markets for South-east Asia and Pakistan.
RBS acquired ABN Amro for around 70 billion euros (S$142 billion) last year, in the biggest-ever banking takeover, with partners Dutch-Belgian group Fortis and Spain’s Santander.
Mr Aurangzeb said the merger has resulted in a “financial powerhouse” which offers the whole spectrum of banking services. This includes retail banking, sector coverage, credit markets, structured finance, small and medium enterprise banking, transaction banking and private banking under the RBS umbrella.
RBS’ takeover of ABN Amro gives it access to 600 million households and more than three million credit cards in Asia, he added. The firm targets to be among the top three foreign banks in Asia in the retail and commercial markets.
What ABN Amro brings to the table is corporate finance, its mergers and acquisitions franchise, and also its capital markets expertise. “This complements RBS’ global strengths, especially in risk management products,” said Mr Aurangzeb.
He pointed out that ABN Amro has been active and is established in sectors such as energy, oil and gas, telecom and media – but is totally absent in other sectors like real estate, aviation, shipping and gaming.
Despite the challenging business environment and headwinds in the external environment, Mr Aurangzeb said RBS was looking forward to achieving high double-digit growth in Singapore into the second half of the year.
ASIA KEY TO GROWTH
“It’s very clear that Asia will be an important engine of growth for the RBS franchise overall. We expect the region to contribute at least 10 per cent of the total group’s revenue by 2010.”
Mr Muhammad Aurangzeb (above), RBS’ country executive of Singapore and head of global banking and markets for South-east Asia and Pakistan.