Union de Crédit pour le Bâtiment (UCB), the mortgage specialist of BNP Paribas and Sundaram Finance Ltd (SFL) have reached an agreement regarding a strategic partnership in housing finance in India whereby UCB will acquire a 49.90% stake in Sundaram Home Finance Limited (SHFL), today a wholly-owned subsidiary of SFL. The investment will be made through a combination of new issue of equity shares by SHFL and purchase of existing equity shares. SFL will retain a 50.1% equity stake in the company. The joint venture will be named Sundaram BNP Paribas Home Finance Limited. Subject to relevant regulatory approvals, the transaction is expected to be completed in three months’ time.
With an over Rs. 1,250 crores (over EUR 231 million). loan portfolio, SHFL provides a wide range of housing finance products, largely focusing on retail customers. Significant synergies are expected on both sides and the joint venture aims at growth, strongly supported by an exclusive distribution team provided by SFL and UCB’s specialisation in housing finance globally.
Commenting on the joint venture, S. Viji, Chairman of SFL said, “the joint venture will combine the strength of the Sundaram Finance brand, the extensive distribution reach and retail credit management expertise of SF with the specialised housing finance skills of UCB and the global brand strength of BNP Paribas. With this joint venture, we are well positioned to build on the already strong platform that has been established by SHFL. We believe that this partnership will put the company on a faster growth path. This further strengthens the existing relationship between the Sundaram Finance group and the BNP Paribas group, coming as it does on the heels of the successful partnership in the asset management space.”
Laurent Chouraki, CEO of UCB – Private Mortgage business line of BNP Paribas said, “Mortgage market in India is growing fast, driven by the important housing needs of Indian population. A partnership with a strong and reliable local partner as Sundaram Finance group will enable us to participate in the development of the housing finance industry in India. We intend to share with SHFL the experiences that UCB has gained so far thanks to its international presence, and to bring some innovative mortgage solutions to the Indian market. We are convinced that this partnership will reinforce SHFL’s market position”.
About Sundaram Finance and Sundaram Home Finance Limited
Sundaram Finance (www.sundaramfinance.in), with over five decades in the financial services space, is one of the largest retail financial services players in India with assets exceeding Rs. 5,000 crores (over EUR 925 million). In addition to vehicle financing, the SFL group offers a broad spectrum of financial products to its retail customers, including home loans, mutual funds, and general insurance products. SFL has a nationwide network of over 170 branches and more than 2,000 people. It distributes a wide range of retail financial products through Sundaram Direct, a pan India network with a 1400-strong sales force. SFL also has a presence in the BPO and IT segments through its divisions Sundaram Business Services and Sundaram Infotech Solutions respectively. It has a strong presence in each of the business segments it operates in.
Sundaram Home Finance Limited is currently a 100% subsidiary of SFL and has a loan portfolio of over Rs. 1250 crores (EUR 231 million). SHFL has a range of home finance products catering to various categories of customers, primarily Indian and NRI retail customers.
About BNP Paribas and UCB
BNP Paribas (www.bnpparibas.com) is a European leader in banking and financial services, and ranks among the world’s top 15 banks by market capitalization. It has around 140 000 employees, 110 000 of whom are based in Europe. The group occupies leading positions in three significant fields of activity: Corporate and Investment Banking, Asset Management & Services and Retail Banking. It is present in 85 countries and has a strong presence in all the key financial centres. Present throughout Europe, in all its business lines, France and Italy are its two domestic markets in retail banking. BNP Paribas enjoys a significant and growing presence in the United States and leading positions in Asia and in emerging markets.
BNP Paribas India (www.bnpparibas.co.in) operations date back to 1860 and it currently has a network of branches covering eight major cities. BNP Paribas India offers world class banking solutions through its core business lines, Corporate & Investment banking and Private Banking. In addition to financing clients, both corporate and financial institutions, BNP Paribas India is one of the top providers of structured risk management solutions, cash management and trade finance; BNP Paribas India offers Indian HNWI highly sophisticated private banking services. In addition, it has a 49.9% interest in an asset management joint venture with Sundaram Finance, a 26% interest in a life insurance joint venture with State Bank of India and 27% interest in Geojit Securities.
UCB a wholly-owned subsidiary of BNP Paribas has been a mortgage specialist in France for more than 50 years. Today, UCB is a leading private mortgage provider with international coverage. UCB has operations in a dozen countries across Europe, offering a complete range of mortgage solutions, distributed directly or through intermediaries.
Isabelle Wolff (BNP Paribas) + 33 1 40 14 65 16
Catherine Patin (UCB) + 33 1 41 42 49 80
S Prabhu, Ogilvy PR (SFL's agency) + 919 444 040 748