The Royal Bank of Scotland Group (RBS), a banking and insurance company with operations in Europe, North America and Asia, reportedly has sold its 4.6-percent stake in SKS Microfinance, an Indian microfinance institution, through the open market to Merrill Lynch Capital Markets Espana, a subsidiary of US-based Bank of America. The stake was valued at INR 630 million (USD 11.7 million). RBS purchased the 5 million shares of SKS from Deutsche Securities Mauritius, a subsidiary of Deutsche Asia Pacific Holdings, in September 2012 for approximately INR 587 million, which was equivalent to USD 10.3 million at the time, as reported by MicroCapital.
As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million disbursed to approximately 3.9 million borrowers. SKS, which does not accept deposits, reports return on assets (ROA) of -45.8 percent and return on equity (ROE) of -111 percent as of March 2012. As of year-end 2012, RBS reported total assets of USD 1.6 trillion, and Bank of America reported total assets of USD 2.2 trillion.
By Brian LeBlanc, Research Associate
About SKS Microfinance
SKS Microfinance is a for-profit microfinance institution (MFI) that was launched in 1998. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It since diversified into offering gold loans and microinsurance services but does not accept deposits. As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million disbursed to approximately 3.9 million borrowers. As of March 2012, SKS reported return on assets (ROA) of -45.8 percent and return on equity (ROE) of -111 percent. SKS trades on the Bombay Stock Exchange and India’s National Stock Exchange.
Sources and Additional Information:
Live Mint article, http://www.livemint.com/Companies/FDV671Ft4j8JaD9jZyXw0L/RBS-sells-462-stake-in-SKS-Microfinance-for-63-cr.html
MicroCapital article, April 2, 2013, “MICROCAPITAL BRIEF: Government of India’s Andhra Pradesh Moves to Challenge Supreme Court Interim Order as SKS Microfinance Resumes Operations in the State,”https://www.microcapital.org/microcapital-brief-government-of-indias-andhra-pradesh-moves-to-challenge-supreme-court-interim-order-as-sks-microfinance-resumes-operations-in-the-state/
MicroCapital article, March 1, 2013, “MICROCAPITAL BRIEF: SKS Microfinance Fined $92k for Collcting Improper Fees as Agent of Bajaj Allianz Life Insurance,”https://www.microcapital.org/microcapital-brief-sks-microfinance-fined-92k-for-collecting-improper-fees-as-agent-of-bajaj-allianz-life-insurance/
MicroCapital article, February 5, 2013, “MICROCAPITAL BRIEF: Indian Microlender SKS Microfinance Reports Profits After Seven Quarters of Losses,”https://www.microcapital.org/microcapital-brief-indian-microlender-sks-microfinance-reports-profits-after-seven-quarters-of-losses/
MicroCapital article, October 4, 2012, “MICROCAPITAL BRIEF: SKS Microfinance of India Posts Portfolio Growth of 21% Outside Andhra Pradesh; Royal Bank of Scotland, Morgan Stanley Asia Purchas Stakes as Deutsche Securities Mauritius Cashes Out,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-posts-portfolio-growth-of-21-outside-andhra-pradesh-royal-bank-of-scotland-morgan-stanley-asia-purchase-stakes-as-deutsche-bank-cashes-out/
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