StanChart to buy 25.9% more in UTI Sec next year

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.

Standard Chartered to acquire 49% stake in UTI Securities

Global banking major Standard Chartered Plc on Thursday entered into a strategic partnership with the Securities Trading Corporation of India (STCI) to acquire the latter's 49 per cent stake in UTI Securities for Rs 147 crore.STCI owns 100 per cent of UTI Securities after acquiring it in 2006 from the Administrator of the Specified Undertaking of the Unit Trust of India.

Under the agreement, the parties have provided for necessary options to raise Standard Chartered's stake to 100 per cent in stages by 2010, subject to necessary regulatory approvals, a release issued here today said.

According to Standard Chartered CEO Neeraj Swaroop, "the partnership will enable Standard Chartered to broaden its product offering in wealth management and private banking within India and the non-resident Indian (NRI) product portfolio in our footprint countries."

StanChart-UTI Securities Deal May Be Cleared By FIPB Today

Standard Chartered Bank's proposal to pick up 49 per cent stake in broking firm UTI Securities is under the consideration of Foreign Investment Promotion Board (FIPB), reports TV channel CNBC-TV18.FIPB is taking up the Stanchart proposal at a meeting to be held on August 17. So this deal is likely to be cleared today. The financial terms are not known as this post is being written.

UTI Securities is currently owned by Securities Trading Corporation of India, which had put 49 per cent stake in the broking firm on the block. There were several firms like Kuwait's Global Investment House, Citigroup, Macquarie Bank, and Societe Generale in talks with STCI to buy a stake.

Several banks are looking for an entry into broking and financial products distribution, so a firm like UTI Sec offered synergy. STCI bought UTI Sec in February 2006 for Rs 265 crore from the Specified Undertaking of UTI. STCI will sell 49 per cent of it now, and the rest after the lock-in period which will end in 2009.

StanChart close to buying stake in UTI

Asia-focused bank Standard Chartered plc is in final talks to buy a 49 percent stake in Indian brokerage UTI Securities, the latest bank to buy into the country's brokerage sector.

The deal would help Standard Chartered expand its services for wealthy customers in India, a fast-growing private banking market, by offering stock brokerage.

"The UTI transaction is in final due diligence," Peter Flavel, Standard Chartered's global head of private banking, said in Singapore, confirming earlier press reports.

Standard Chartered is joining a clutch of foreign players, including Citigroup Paribas that have invested in India's fast-growing brokerage sector.

UTI, which is owned by the Securities Trading Corp. of India, has 170 branches across the country, according to press reports.

Read more in The Economic Times article.

StanChart-UTI deal on Monday

UK-headquartered Standard Chartered Bank is set to become the third foreign player to enter the Indian retail stock brokerage business by buying a 49 per cent stake in UTI Securities for Rs 140-150 crore.

UTI Securities is currently fully-owned by Securities Trading Corporation of India (STCI). Sources said an agreement would be signed between the two parties in the coming week, probably on Monday.

The stake price values UTI Securities at Rs 300-325 crore. STCI, a primary dealer in government securities, had bought the entire UTI Securities stake for Rs 265 crore last year from Specified Undertaking of UTI, the trading arm spun off from the financial institution UTI in 2001-02.

The deal with Specified Undertaking of UTI requires STCI to have a minimum lock-in of its 51 per cent stake in UTI Securities for three years.

Read more in The Business Standard article.