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| BNP to decide on Fortis after shareholders' approval |
| Press Trust Of India / Mumbai Apr 24, 2009, 00:40 IST |
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European banking major, BNP Paribas, said today that it would take a decision on the integration of Fortis’ Indian operations with itself once the latter’s shareholders approve the acquisition.
Fortis’ shareholders are slated to meet on April 28-29 to approve the sale of a 75 per cent stake in its banking arm to BNP Paribas for an estimated 14.5 billion euros.
In October 2008, BNP Paribas had agreed to acquire Fortis’ Belgium and Luxembourg operations as well as international franchises after the latter failed to survive the financial crisis. At present, BNP Paribas has a tie-up with the Sundaram Group for mutual fund business. BNP Paribas holds 49.9 per cent in the joint venture.
Through the acquisition, BNP Paribas will also integrate ABN Amro’s mutual funds assets, earlier bought by Fortis.
“Shareholders are meeting late this month to approve the Fortis’ acquisition... We haven’t yet decided what to do with the Indian asset management business,” BNP Paribas (Corporate and Investment Banking) Chief Executive and Country Manager Frederic Amoudru told reporters here.
If the deal goes through, BNP Paribas will have to either exit its existing MF joint venture with Sundaram, or to merge the business with Fortis. Current regulations do not permit any entity to run the same business through different units.
“We haven’t decided whether to merge or sell... There are various options. We will decide that after the (Fortis) shareholders’ meeting,” Amoudru said.
If the Fortis acquisition happens, BNP Paribas will have a combined deposit base of around 600-billion euros.
BNP was re-evaluating its entry into the NBFC space due to the impact of the global financial crisis in this market, Amoudru said.
“The proposal (to set up an NBFC) had advanced recently. But, given the crisis in financial markets, we are evaluating the proposal,” Amoudru said.
The group’s aim was to serve clients on the capital market side through the NBFC.
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