Bank of India, the country’s third largest government bank is going to re-enter into investment banking to tap more fee-based income. The bank had quit investment banking in 2001 owing to the weak response. To run this vertical, the Mumbai-based bank has promoted general manager NK Sood as the managing director to take charge of the investment banking branch. In November last year, the bank started BoI Merchants Banker, which is wholly owned by the bank, to run this vertical.
Among the state-owned banks, only State bank of India runs an investment banking arm, known as SBI Capital market. According to a senior official of the bank, the investment banking entity has received category -1 license and has done some offshore and onshore loan syndications. Also, SBI Capital market has helped some companies to raise funds by the sale of short-term debt securities and commercial papers.
Bank of India’s new investment banking entity is aimed to generate fees by arranging domestic bond sales, qualified institutional placements, and initial public offerings. In 1976, the bank had started its journey in the field of investment banking under the name of BoI Finance. According to insiders, BoI Finance had managed organizing about 50 IPOs. However, it stopped in 2001. It this fresh venture, the bank aims to employ experienced people after getting the approval from the board. In the last financial year, the bank registered a net loss of Rs 56 crore, compared to the net profit of Rs 557.5 crore it had achieved in the last year.