Key points:
- Bank of Baroda (BoB) plans to sell up to 49 percent stake in its credit card business arm, BOB Financial Solutions Ltd., which is currently fully owned by the bank.
- The divestment aims to attract strategic investors and create more value in BOB Financial Solutions, driving its growth to the next level.
- In the fiscal year 2022-2023, BOB Financial Solutions doubled its acquisition of new credit cards, reaching 1.2 million issued cards compared to 0.5 million in the previous year. Retail spending also more than doubled to approximately Rs 17,300 crore, contributing to the company’s net profit more than doubling to Rs 24.62 crore from Rs 10.07 crore in the previous year.
Mumbai, July 2, 2023 – State-owned Bank of Baroda (BoB) has announced its intention to sell up to 49 percent stake in its credit card business subsidiary, BOB Financial Solutions Ltd. Currently, BoB holds full ownership of the credit card arm.
The decision to divest is aimed at attracting strategic investors and creating more value in BOB Financial Solutions, propelling it to the next level of growth, according to a senior bank official. BoB has initiated the process by floating a Request for Proposal, with expectations to complete the selection of a strategic investor within one year.
In the fiscal year 2022-2023, BOB Financial Solutions witnessed significant growth. The company doubled its acquisition of new credit cards, issuing approximately 1.2 million cards compared to 0.5 million in the previous year. Retail spending also experienced substantial growth, more than doubling to approximately Rs 17,300 crore, compared to Rs 7,000 crore in the previous fiscal year. These positive results contributed to the company’s net profit more than doubling to Rs 24.62 crore, up from Rs 10.07 crore in the same period last year.
Established in 1994 as a non-banking financial company and a wholly-owned subsidiary of BoB, BOB Financial Solutions Ltd primarily focuses on issuing credit cards. The company differentiates itself by offering simple, transparent products that are reasonably priced and easily accessible through a streamlined digital application process.
The divestment of up to 49 percent stake in BOB Financial Solutions is expected to attract strategic investors who can contribute to the company’s growth and unlock its full potential in the credit card market. BoB aims to leverage this partnership to expand its reach, enhance customer experience, and drive further innovation in the financial services sector.
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