Dutch group ING, which is raising its stake in Vysya Bank to 43.99 per cent, will bring its other subsidiaries in the country under the umbrella of Vysya Bank. This integration is likely to take place in the next 12-18 months.
The ING Group is also believed to be toying with the idea of buying out five per cent stake from IFC to raise its holding to 49 per cent. IFC is in talks with the Reserve Bank of India (RBI) to sell part of its stake to the group.
The ING Group has three subsidiaries in the country. They are ING Bank, the corporate and investment banking arm, a private banking outfit and an asset management company.
ING Bank has a direct presence in the country through two branches in Mumbai and Delhi with an employee strength of 51. The private banking arm which is also based in Mumbai, has around 20 people while the asset management company employs around 40 people. "Over time, the other arms will be integrated into Vysya Bank," said ING Bank's director Sheel Kohli.
Vysya Bank concentrates on retail, small and medium enterprises while ING Bank concentrates more on the large size corporates. "The bank will use the expertise to tap all the segments. ING group will also bring in lending products and savings products from its global stable into the Indian arena," said Kohli.
"ING usually takes stakes in banks and use these banks to sell all the products such as insurance and mutual funds. Similar stakes have been taken by the bank in Poland and the Netherlands," Kohli added.
ING currently has two members on the 14-member board of the Vysya Bank which it plans to increase. The GM Rao Group's strength will come down from six to three on the board. "We are proposing to have GMR as the non-executive chairman of the bank," Kohli further said.
K Balasubramaniam will continue to be the managing director and chief executive officer of the bank and BBL executive Bart Hellemans will remain as deputy managing director.
The GM Rao Group has no plans to decrease its stake from around 5 per cent which it will have now. "We have been associated with the bank since its inception and want to continue our relations with the bank," sources from the GMR group said.
The group wants to invest the money from the stake sale in its infrastructure activities, which includes the Hyderabad International airport project and Tanir Bavi Barge mounted project near Mangalore in Karnataka. However, no final decision has been taken in this regard.
ING had acquired stake in Vysya Bank when it bought over BBL Worldwide. Its stake in the bank is currently through two entities -- BBL Holdings (10.21 per cent) and BBL Investments (9.79 per cent). According to analysts, ING is increasing its stake in the bank through different entities to skirt the cap on voting rights in private sector banks which have been restricted to 10 per cent.
BBL had increased its stake in the bank from nine per cent to 20 per cent in November 2000.
