Bank of Baroda (BoB), a state-owned bank, has announced its plans to sell up to a 49 percent stake in its credit card business arm, BOB Financial Solutions Ltd. Currently, BoB holds 100 percent ownership of the subsidiary.
To facilitate this strategic move, BoB has initiated a Request for Proposal process to attract a suitable strategic investor. The bank anticipates completing the selection process within a year, as stated by a senior bank official.
The objective behind the stake sale is to generate greater value for BOB Financial Solutions and propel it towards the next phase of growth. BoB aims to offload up to 49 percent of the subsidiary’s capital through a combination of primary and secondary investment from one or more investors.
The performance of BOB Financial Solutions has been impressive, with the issuance of approximately 1.2 million credit cards in FY23, doubling the figure from the previous year’s 0.5 million. The company has also witnessed a substantial increase in retail spending, reaching around Rs 17,300 crore in FY23, compared to Rs 7,000 crore in FY22, as mentioned in BoB’s annual report. Additionally, the net profit of the non-banking financial company (NBFC) more than doubled to Rs 24.62 crore in the year, compared to Rs 10.07 crore in the corresponding period of the previous year.
Established in 1994 as a wholly-owned subsidiary of BoB under the name BOB Cards Ltd., BOB Financial Solutions primarily operates in the credit card issuance business. The company’s key differentiating factors include straightforward, transparent products with fair pricing, efficient customer service, and a user-friendly digital application process.
Discover more from Business Headline
Subscribe to get the latest posts to your email.
, a state-owned bank, has announced its plans to sell up to a 49 percent stake in its credit card business arm, BOB Financial Solutions Ltd. Currently, BoB holds 100 percent ownership of the subsidiary.){kind=link}