BNP Paribas to buy Sharekhan

The deal marks BNP's second big play at retail broking in India. In 2007 the company bought a 34 percent stake in a domestic brokerage, renamed it BNP Geojit Paribas Financial Services and it now has about 750,000 retail clients

Mumbai: France's biggest bank, BNP Paribas, has agreed to buy Indian brokerage Sharekhan for an undisclosed sum as it looks to beef up retail broking operations in India, taking advantage of a surge in retail investments into stocks.

A rally in share markets that sent indexes to record highs in March is attracting hordes of individual investors, improving the outlook for retail brokers after years of weak profits.

Analysts believe there is large potential for growth in the brokerage sector, since fewer than 1.5 percent of households put money directly into shares, compared with around 10 percent in China and 20 percent in the United States.

The deal marks BNP's second big play at retail broking in India. In 2007 the company bought a 34 percent stake in a domestic brokerage, renamed it BNP Geojit Paribas Financial Services and it now has about 750,000 retail clients.

BNP, whose financial offerings in India include corporate and retail banking, investment banking and wealth management, said the purchase of Sharekhan will allow it to further expand into brokerages as well as asset management in India.

"Sharekhan will serve as a platform for the group’s strategy in India to offer a comprehensive range of products," Joris Dierckx, country head of BNP Paribas, said in a statement.

Although India had seen a surge in retail interest in stocks in the last decade, a crash after the global financial crisis of 2008 drove individual investors away from equities for years, returning to a traditional preference for property and gold.