After having acquired 49% stake for Rs 147 crore in UTI Securities, Standard Chartered Bank is looking to buy another 25.9% next year. It plans to take complete control of the financial services firm by 2010.
“Under the agreement with Securities Trading Corporation of India (STCI), we have the option to increase our stake to 100% in UTI Securities by 2010. We will be looking at acquire an additional 25.9% at a fixed price in 2008, while the remaining stake will be acquired in 2010 for the amount, which still needs to be determined,” said Neeraj Swaroop, chief executive officer-India, Standard Chartered Bank.
The proposal for clearing the stake was cleared by FIPB on Tuesday and the final deal was signed on Thursday.Swaroop said the management control would rest with both the partners, STCI and StanChart. “There will be 8 members on the board — 4 from STCI, 3 from StanChart and 1 is an independent director”.
With this acquisition, the foreign bank will be able to reap the benefits of institutional broking, retail broking and online broking facilities. “We can now use the retail banking portal, mutual fund products, investment banking and institutional brokerage facilities of UTI Securities. Their huge product range will help 2 million customers,” Swaroop said.
This strategic partnership will help the foreign bank establish offices in places where UTI Securities have its presence. As it is difficult for foreign banks in India to acquire licenses from the regulator, this is the best way for the bank to expand its network.
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