Page 426 - The Case Lab Book

"But, medium term, RBS obviously feels the wholesale banking operation was a very big
consolation prize indeed for missing out on LaSalle.

"It is not as immediately understandable to the man in the street as retail banking, but when
financial markets recover, as they surely must at one stage, the Royal has certainly enhanced its
position in them."

RBS: hoping for. Chicago-based LaSalle, which was the asset it was after when it first entered
the bid had earlier been sold to the Bank of America for $21 billion. RBS, meanwhile, has ended
up with ABN's wholesale division, potentially the most problematic area of the sale as it has the
greatest exposure to the U.S. sub-prime turmoil. (Contemporaneous)

Finally, RBS will take ABN's businesses in the Asia-Pacific. This part of the deal will bring with
it banking licences in 16 countries such as China, Singapore and India where it is notoriously
difficult for non-native banks to win licences. This part of the deal will open up a number of new
markets to RBS and will see it rocket to the fifth largest bank for corporate and financial clients
in the region, where it previously had very little presence.

Acceleration of Royal's expansion in Asia, notably in the emerging economic
powerhouses of China and India, will be a key benefit of the ABN deal for the Scottish
bank.

ABN is much further advanced in China and India, as well as in the likes of the United
Arab Emirates, in terms of its licences to conduct corporate and retail banking and its
existing presence on the ground in these countries.

In general terms, banks become authorised to do greater types and consequently
amounts of business in such countries as the length of time they have been in these
market-places increases.

Although Royal has credit card and wealth management joint ventures with Bank of
China, and has in conjunction with this Chinese partner done about $2bn of corporate
banking transactions in this fast-growing economy, it has only two branches, one in
Beijing and the other in Shanghai.

ABN has 12 branches and about 1000 staff in China. It has had a business in Shanghai
since 1903 and was the first foreign bank to enter the Chinese foreign exchange
market.

In India, ABN has 27 branches and some 7000 staff.

Royal's presence in India is confined to a technology centre which it inherited with its
acquisition of insurer Churchill.

ABN also has a big presence in the Middle East, with about 1500 staff in the United
Arab Emirates and branches in Abu Dhabi, Dubai, and Sharjah.