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BNP Paribas, Bank of Baroda merge India units into asset management joint venture

By Asia Asset Management  
Oct 16, 2019

BNP Paribas Asset Management and Bank of Baroda are combining their wholly-owned investment units in India into a joint venture asset management firm with at least 121.6 billion rupees (US$1.7 billion) of assets.

According to a joint statement from the companies on October 14, the merger of Baroda Asset Management India and BNP Paribas Asset Management India will allow them “to leverage each other’s strengths to offer products specifically designed for retail and institutional clients” in the country.

Details such as the shareholding in the joint venture firm and its name were not disclosed and a spokesperson for BNP Paribas Asset Management declined to provide the information.

Spokespersons for the Indian bank and its unit did not immediately respond to questions from Asia Asset Management (AAM).

Baroda Asset Management India had 121.6 billion rupees of assets under management as of November 2018.

BNP Paribas Asset Management does not provide assets data for the unit, or a regional breakdown, and analysts say it’s impossible to estimate the figure.

State-owned Bank of Baroda, based in the state of Gujarat, is the third largest lender in India, with 9,500 branches across the country.

“By leveraging Bank of Baroda’s large number of branches for distribution and our global experience of managing assets across more than 30 markets, this partnership will enable us to offer products and services to a much larger investor base in India,” Ligia Torres, BNP Paribas Asset Management’s chief executive officer for Asia Pacific, says in the statement.

The deal is subject to regulatory and legal approvals.

According to a Hong Kong-based fund analyst, global asset managers are tying up with Indian financial institutions to boost their exposure to a market with the second largest population in the world after China.

“With the large market size in India, many foreign companies such as Manulife and Prudential Financial form strategic partnerships with Indian banks or acquire local managers to strengthen their product distribution network in the country,” the analyst tells AAM, speaking on condition of anonymity.

BNP Paribas Asset Management, the investment management arm of French lender BNP Paribas, had 427 billion euros ($470.9 billion) of total assets as of June 2019.