Bank of Baroda MF arm to merge with BNP Paribas AMC

Baroda Asset Management India, a wholly-owned subsidiary of Bank of Baroda, on Friday announced its merger with BNP Paribas Asset Management India. Bank of Baroda and BNP Paribas Asset Management Asia have entered into binding agreements for the merger.

The transaction also includes merger of BNP Paribas Trustee India with Baroda Trustee India.

The joint statement said the strategic alliance allows both the companies to leverage each other’s strengths to offer products specially designed for retail and institutional clients in India. This demonstrates their ongoing commitment to introducing new products to cater to the increasing investment appetite of investors.

“We are pleased to partner with a global organisation such as BNP Paribas Asset Management. We value their expertise and the robust investment and risk management processes they have to offer. This joint venture will allow us to create a stronger, more competitive asset management company in the Indian mutual fund industry with the large distribution network of Bank of Baroda and the expertise of BNP Paribas, coupled with the benefit of the firm’s ability to source offshore funds,” said PS Jayakumar, managing director and CEO, Bank of Baroda.

BoB also said there is no cash consideration in the proposed transaction and Bank of Baroda and BNP Paribas Asset Management Asia will hold 50.1% and 49.9%, respectively, of the paid-up share capital of the merged AMC.

Bank of Baroda in the exchange filing said the average asset under management (AAUM) of Baroda Asset Management India was Rs 11,319.69 crore and for BNP Paribas Asset Management India, it was Rs 10,072.60 crore (including PMS/advisory) for quarter ended March 31, 2019.

Stock of Bank of Baroda on Friday ended at Rs 90.80 up 3.42%, on the BSE.

In last September, Bank of Baroda had completed acquisition of 51% equity stake in both Baroda Pioneer Asset Management Company and Baroda Pioneer Trustee Company from UniCredit SpA. During FY2018-19, the total income of Baroda AMC was Rs 50.19 crore, while for BNPP AMC, it was Rs 96.12 crore.

“India is a key market in the region for BNP Paribas Asset Management. This strategic partnership reinforces both our local footprint and global outreach in the Asia Pacific. By leveraging Bank of Baroda’s large number of branches for distribution and our global experience of managing assets across more than 30 markets, this partnership will enable us to offer products and services to a much larger investor base in India,” said Ligia Torres, chief executive officer Asia Pacific, BNP Paribas Asset Management.