BOB mulls JV for wealth mgmt biz

Bank of Baroda (BOB),  which is planning to provide value-added services for increasing fee-based income, is considering formation of a joint venture for wealth management business. It has already begun recruitment of about 55 managers for wealth advisory services.

"This idea (to rope in  a partner) for wealth management activity is in a nascent stage and there is no time frame set for it. As a first step, we will have wealth advisory managers at key branches," a senior BoB official said after the public sector bank signed a definitive agreement with Pioneer Investments for asset management business.

Pioneer Investments, part of European financial group UniCredito, will acquire a 51 per cent stake in BOB Asset Management from the bank. Both partners did not disclose the amount of premium that Pioneer has agreed to pay for a majority stake in the mutual fund.

The BoB official said there is gradual shift in the savings and investment pattern of bank customers and the rise in investments in mutual funds and equity is distinct. Through advisory services, the bank would be able to get some advisory business from existing customers.

The bank has received response from experienced persons to join wealth management advisory business. official said looking at the compensation package that wealth managers command and high attrition rates, "retaining talent will be a challenge".