Bank of America on Monday said that its 50-billion dollar acquisition of Merrill Lynch would provide it with significant growth opportunities in India.
In an investor presentation webcast to discuss the deal, Bank of America Chairman and CEO Ken Lewis and Merrill Lynch chief John Thian said Merrill Lynch has been focusing on growth in India and the deal would result in “significant growth opportunities” in wealth management and investments businesses in the country.
Merrill Lynch has been the market leader in India with full local capabilities and there has been a significant expansion since increasing stake in DSP Merrill Lynch, the Indian entity, to 90 per cent, they said.
While Merrill Lynch has a notable presence in India, particularly in mutual fund and investment banking segments, BofA has also invested in the country as an emerging market. Bank of America has five branches in India — Mumbai, Delhi, Kolkata, Chennai and Bangalore.
Bank of America has said its Indian banking operations have consistently delivering superior returns year after year. Its revenue in its Indian operations rose 30 per cent to Rs 861.7 crore and profit after tax rose 56 per cent to Rs 305.2 crore for the year ended 31st March, 2008.
In October 2007, Bank of America made a capital injection of Rs 328.2 crore into its India operations, boosting the bank’s capital base and strengthening its capital adequacy ratio.
It also owns a subsidiary in India called Bank of America Securities India Pvt Ltd, which is engaged in underwriting, dealing and trading of corporate fixed income securities and related capital market activities.
On an aggregate basis, the bank’s India business reported a total revenue of Rs 889.9 crore in year ended March, an increase of 30 per cent over the previous year, and a net profit of Rs 323.1 crore at a growth rate of 58 per cent.
During his India visit earlier in May this year, Merrill Lynch CEO John Thain had said that India was the most attractive place for investments.
“When I look around the world where there are great growth opportunities, no place is better than India right now,” he had said.
Globally, the deal is expected to result into thousands of job cuts, but the industry experts said that layoffs could be minimal in India as the two entities are mostly active in separate businesses in the country.
While, Bank of America’s mainstay is banking business and corporate fixed income securities segment, that for Merrill Lynch include mutual fund, equity market investment banking and wealth management businesses.
DSP Merrill Lynch is among India’s leading investment banking and wealth management companies.
Kothari family- promoted DSP and Merrill Lynch have had a joint venture relationship since 1995 and in late 2005 Merrill Lynch announced raising its stake from 40 per cent to 90 per cent.
However, DSPML Fund Managers, a wholly-owned asset management arm of DSP Merrill Lynch, had continued to be operated as a venture jointly owned by DSP Merrill Lynch with 40 per cent and Kothari and related entities with 60 per cent.
Earlier this year, DSP-ML decided to rename the mutual fund entity as DSP BlackRock MF after BlackRock Inc, the top global asset management firm, acquired a 40 per cent stake in it as part of a global deal with Merrill Lynch.
In an investor presentation webcast to discuss the deal, Bank of America Chairman and CEO Ken Lewis and Merrill Lynch chief John Thian said Merrill Lynch has been focusing on growth in India and the deal would result in “significant growth opportunities” in wealth management and investments businesses in the country.
Merrill Lynch has been the market leader in India with full local capabilities and there has been a significant expansion since increasing stake in DSP Merrill Lynch, the Indian entity, to 90 per cent, they said.
While Merrill Lynch has a notable presence in India, particularly in mutual fund and investment banking segments, BofA has also invested in the country as an emerging market. Bank of America has five branches in India — Mumbai, Delhi, Kolkata, Chennai and Bangalore.
Bank of America has said its Indian banking operations have consistently delivering superior returns year after year. Its revenue in its Indian operations rose 30 per cent to Rs 861.7 crore and profit after tax rose 56 per cent to Rs 305.2 crore for the year ended 31st March, 2008.
In October 2007, Bank of America made a capital injection of Rs 328.2 crore into its India operations, boosting the bank’s capital base and strengthening its capital adequacy ratio.
It also owns a subsidiary in India called Bank of America Securities India Pvt Ltd, which is engaged in underwriting, dealing and trading of corporate fixed income securities and related capital market activities.
On an aggregate basis, the bank’s India business reported a total revenue of Rs 889.9 crore in year ended March, an increase of 30 per cent over the previous year, and a net profit of Rs 323.1 crore at a growth rate of 58 per cent.
During his India visit earlier in May this year, Merrill Lynch CEO John Thain had said that India was the most attractive place for investments.
“When I look around the world where there are great growth opportunities, no place is better than India right now,” he had said.
Globally, the deal is expected to result into thousands of job cuts, but the industry experts said that layoffs could be minimal in India as the two entities are mostly active in separate businesses in the country.
While, Bank of America’s mainstay is banking business and corporate fixed income securities segment, that for Merrill Lynch include mutual fund, equity market investment banking and wealth management businesses.
DSP Merrill Lynch is among India’s leading investment banking and wealth management companies.
Kothari family- promoted DSP and Merrill Lynch have had a joint venture relationship since 1995 and in late 2005 Merrill Lynch announced raising its stake from 40 per cent to 90 per cent.
However, DSPML Fund Managers, a wholly-owned asset management arm of DSP Merrill Lynch, had continued to be operated as a venture jointly owned by DSP Merrill Lynch with 40 per cent and Kothari and related entities with 60 per cent.
Earlier this year, DSP-ML decided to rename the mutual fund entity as DSP BlackRock MF after BlackRock Inc, the top global asset management firm, acquired a 40 per cent stake in it as part of a global deal with Merrill Lynch.
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