To hunt for other financial players to get into a comprehensive alliance
Spanish financial sector player Banco Bilbao Vizcaya Argentaria (BBVA) has called off plans to acquire a 51 per cent stake in BOB Cards, the card subsidiary of Bank of Baroda, citing a change in its business strategy.
BBVA had signed a memorandum of understanding with the public sector lender in December 2010. It had planned to convert the bank's card subsidiary into a joint venture. BBVA was scheduled to invest EURO 34 million in the deal.
Bank of Baroda on Wednesday informed the Bombay Stock Exchange BBVA considered it an ideal partner. However, owing to a change of strategy within BBVA, the firm may not be able to carry out the deal.
N S Srinath, executive director, Bank of Baroda, said business at the credit card subsidiary was continuing and as of now, the bank did not plan to rope in a different partner for BOB Cards.
In a statement, Joiel Akilan, chief representative (India), BBVA, said after a thorough review of the proposed venture, the company had decided its scope was too small to implement BBVA's business model. He added BBVA considered India a very attractive market and that its relationship with the bank was outstanding. BBVA was open to exploring other possible alliances, he said.
BBVA's efforts to forge alliances for its asset management business in India have not borne fruits. The company had earlier held talks with two other public sector lenders —Union Bank of India and Bank of India — for an alliance in its mutual fund business. However, Union Bank tied up with Belgium's KBC of Belgium for its asset management business, while bank of India chose Bahrain Axe as a partner for its mutual fund business.
BBVA would continue to maintain its representative office in India. The company is active in offshore loan markets for Indian companies and is registered with the Securities and Exchange Board of India as a foreign institutional investor qualified to operate in capital and debt markets.