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Friday, May 10, 2002

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BoA's debt products investment unit soon

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Mr. Duncan. E. Goldie-Morrison (right), Managing Director-Head of Global Markets Group & Emerging Markets, Bank of America, Mr Colm McCarthy (centre), President, Bank of America, Asia, and Mr V. Ahuja, Managing Director & Country Head, Bank of America, at a press conference in Mumbai on Thursday.


BANK of America (BoA) is setting up a new outfit for investing exclusively in debt products in India.

The bank has applied to SEBI for registration as a "debt FII", Mr Duncan E. Goldie-Morrison, Managing Director and head of global markets Group and Asia, said on Thursday. The `debt FII' will invest particularly in "structured products".

The bank, which has already committed $50 million for investment in India, would be bringing in part of the fund soon, said Mr Vishwavir Ahuja, Managing Director and Country head, Bank of America. Last year, the bank brought in $11 million for its Government securities operations.

The debt FII will do complex structured debt deals for Indian corporates. "We have no investment target. The FII will leverage on market opportunity," he said.

Mr Goldie-Morrison, who is currently in India, told newspersons here that the bank was also looking at India for business process outsourcing for its international operations. The bank already has contracts with Indian IT majors such as Infosys and TCS for meeting its software requirements.

The bank, which currently employs around 350 people in India, would be recruiting more, he added.

BoA recently set up a new subsidiary in India for gilt trading.

Mr Goldie-Morrison said BoA, the largest consumer bank in the US, which has already established a strong home base, is now focusing in Europe and Asia. It recently hired more people for its London operations.

The bank's strategy is to be an arranger of capitals rather than provider of funds. "We have already reduced our balance sheet size," he said

For growth in Asia, the bank is focusing on three major areas: debt capital raising, global markets and working capital management. "We will be investing in growing our capabilities in these areas," Mr Goldie-Morrison said.

In Asia, the focus is on Hongkong, India, Taiwan, South Korea and Singapore. Last year, BoA opened its fifth branch in India, in Bangalore.

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