Bank of Baroda (BoB) has revived plans to induct a strategic partner in BOB Financial Solutions Ltd (BFSL) in a bid to enlarge its credit card and merchant base and further improve technology infrastructure.
This comes about a decade after Spanish Bank, Banco Bilbao Vizcaya Argentaria (BBVA) backed out of a deal to pick up 51 per cent stake in BFSL, BoB’s wholly-owned subsidiary.
Sanjiv Chadha, MD & CEO, said: “Our credit card business is showing very good growth momentum for the last one year. And, that is where we again are exploring the possibility whether it might be a good time to get a partner.
“If we can get somebody with either distribution strength, which complements us, or technology, which helps the company, then it is something which works well for us. So, that is a possibility which we are exploring.”
Chadha observed the proposal to induct a partner in BFSL is not with an eye on any release of capital. He emphasised the Bank is comfortable on the capital front.
BFSL issued more than 5 lakh new credit cards in FY22, according to BoB’s latest annual report. Further, retail spends more than doubled compared to FY21, clocking about ₹7,000 crore.
As per the report, BFSL, which was the first non-banking company in India to issue credit cards, has joined the elite club of issuers with a base of one million or more credit cards.
BoB and BBVA had entered into a Memorandum of Understanding in 2010 for a joint venture in the credit card business.
The public sector bank, in a regulatory filing in February 2013, said BBVA informed, although they consider BoB as an ideal partner, due to change of strategy within BBVA, they may not be able to proceed further in the matter.