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BoB to sell 49% stake in credit card biz

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BoB to sell 49% stake in credit card biz:

Bank of Baroda (BoB) plans to sell up to 49 per cent stake in credit card business arm BOB Financial Solutions Ltd. Currently, it is 100 per cent owned by BoB.

The bank has floated a Request for Proposal for roping in a strategic investor, and the process is expected to complete in one year, a senior bank official said.

BOB intends to offload up to 49 per cent in a combination of primary and secondary capital from one or multiple investors to create more value in BOB Financial Solutions and take it to the next level of growth, the official said.

BOB Financial doubled the acquisition of new credit cards in FY23 by issuing close to 1.2 million credit cards compared to 0.5 million a year ago.

"Retail spends too more than doubled compared to FY 2022, clocking approximately Rs 17,300 crore (compared to Rs 7,000 crore in FY 2022)," BoB said in its annual report.

At the same time, the net profit of the NBFC also more than doubled to Rs 24.62 crore against Rs 10.07 crore in the year-ago period.

BOB Financial Solutions Ltd, formerly known as BOB Cards Ltd, was established in 1994 as a non-banking financial company, a wholly-owned arm of BoB.

Its primary business is issuance of credit cards, with its key differentiator being simple, easy-to-understand products that are fairly priced, efficiently serviced, and can easily be availed through a digital-all application process.
 
BoB to sell 49% stake in credit card biz:

Bank of Baroda (BoB) plans to sell up to 49 per cent stake in credit card business arm BOB Financial Solutions Ltd. Currently, it is 100 per cent owned by BoB.

The bank has floated a Request for Proposal for roping in a strategic investor, and the process is expected to complete in one year, a senior bank official said.

BOB intends to offload up to 49 per cent in a combination of primary and secondary capital from one or multiple investors to create more value in BOB Financial Solutions and take it to the next level of growth, the official said.

BOB Financial doubled the acquisition of new credit cards in FY23 by issuing close to 1.2 million credit cards compared to 0.5 million a year ago.

"Retail spends too more than doubled compared to FY 2022, clocking approximately Rs 17,300 crore (compared to Rs 7,000 crore in FY 2022)," BoB said in its annual report.

At the same time, the net profit of the NBFC also more than doubled to Rs 24.62 crore against Rs 10.07 crore in the year-ago period.

BOB Financial Solutions Ltd, formerly known as BOB Cards Ltd, was established in 1994 as a non-banking financial company, a wholly-owned arm of BoB.

Its primary business is issuance of credit cards, with its key differentiator being simple, easy-to-understand products that are fairly priced, efficiently serviced, and can easily be availed through a digital-all application process.
GO PUBLIC!
 
Here is the EOI in case any one is interested in buying: https://www.bankofbaroda.in/-/media...er-inviting-eoi-for-bfsl-10-03-2023-09-24.pdf

As per the EOI, BOB financial is one of only two standalone NBFC allowed to issue credit cards in India. Other NBFC is SBI Cards I think. All other issuers are full fledged banks. Not sure how Amex is structured to be allowed to issue CCs.
Date - February 21, 2008

The Reserve Bank of India (RBI) has issued a restricted banking licence to American Express Bank (Amex) to conduct credit card and travel-related businesses in India.

This has cleared the deck for the merger of Amex's banking businesses in India with that of Standard Chartered (StanChart) Bank as part of an $860-million global deal.

This is the first time that such a licence has been issued. StanChart is acquiring American Express Bank (AEBL), a wholly-owned subsidiary of American Express Company that is present in 47 countries, excluding the travel and credit card business.

Amex wanted to retain its credit card and travel business in India by transferring it to a non-banking finance company (NBFC). This did not find favour with the RBI as the regulator was not comfortable with an NBFC without a bank as a partner issuing credit cards.

Amex then approached the banking regulator with a suggestion that it be issued a restricted banking licence to conduct credit card and travel-related businesses.

"The RBI only gives one banking licence. It is up to the bank what line of business it chooses to pursue or enter. Amex wants to continue with the credit card and travel business,'' said a banking source.

Responding to Business Standard's email query, Amex's spokesperson said, "We see tremendous opportunity in India and intend to continue growing our payments business and maintain significant operations in the market. We are currently working to obtain the appropriate regulatory approvals.''

Amex has convened a meeting of its shareholders on February 28 in New York to consider and approve the scheme of amalgamation with or without modification of the Indian undertaking of the company with the Indian undertaking of StanChart. Once approved, the amalgamation will be subject to the subsequent approval of the RBI and other authorities.
 
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