RBS scales back operations from Romania

Royal Bank of Scotland reported net losses of 24.1 bln pounds (34.3 bln US dollars) in 2008, thus marking the biggest fall in the British corporate history.

After buying up Fortis and Santander groups at huge price, the Dutch competitor, ABN Amro is severely impacted by the global crisis. Deemed by many analysts as a useless deal, the takeover of ABN Amro by the British bank affected its operations in Romania market.

The bank said it would put 325 bln pounds of investments into a state insurance scheme. The bank had estimated 22 – 28 bln pounds losses. The weak performances reflect the massive writedown after the ABN Amro deal.

RBS, 68% held by British taxpayers after the 20 bln pounds state injection in October 2008, said it would pay 6.5 bln pounds to enter the state insurance program, which would help banks to unlock the lending flow.

On February 15, Times magazine said RBS would likely reduce operations in Romania, Slovakia and Uzbekistan, but it would probably keep an international network of commercial banks, in the context of 30 bln pounds, which would lead to a new set of layoff.

ABN Amro Romania was rebranded into Royal Bank of Scotland in October 15, 2008, after the acquisition of ABN Amro in October 2007 by Royal Bank of Scotland, Fortis and Santander for roughly 70 bln euros, while the different activity segments of ABN Amro were divided between the three banks.