Mumbai: Spanish financial services group BBVA SA has identified India as one of its key markets in Asia and plans to enter the country through a joint venture with a public sector bank (PSB), a top official of the group said.

The bank has chalked out a road map for India over the next three-four years, which involves a mutual funds venture followed by projects in consumer finance, credit cards and later, life insurance.

“We plan to enter the Indian mutual funds market through a joint venture with a PSB, most likely this year. We are in talks with two banks,” BBVA’s Asia general manager Manuel Galatas said.

While Galatas did not name the two banks his company is negotiating with, he said both had a pan-India presence with a strong branch network.

It is understood that the two banks BBVA is in talks with are Bank of India and Corporation Bank. “We want to tie up with banks with a wide distribution reach and PSBs fit the bill,” Galatas said.

Some time ago BBVA was in talks with Union Bank of India for a mutual funds joint venture, but it is now understood that the Indian bank has zeroed in on Belgium’s KBC Group NV as its partner for its mutual funds business.

Galatas said Indian PSBs had the size and scale, which would not only help BBVA in its mutual funds business but also in its consumer finance and credit card ventures, should it undertake them later.

“We are a prudent bank and would like to enter the Indian market with an entity having local market knowledge. We feel the JV route is the best for us,” Galatas said.

If the mutual funds venture is successful, then BBVA would look at consumer finance and later at credit cards, he said.

“Credit cards will be in our second stage. It is a more complicated business than mutual funds and we need a deeper knowledge of the market and its segmentation. We would also need strong risk management processes,” Galatas said.

On life insurance, he said it would not be immediate but over the next three-four years. Pension funds too could be on the cards, Galatas said. “BBVA has strong relationships with pension fund managers here,” he added. The company, with a market capitalization of €53 billion (Rs3.2 trillion) and more than 8,000 branches worldwide, is also open to acquisitions of mid-sized banks here, when the regulatory environment permits.

The Spanish company entered India in April last year with a liaison office in Mumbai.

“We have a good Indian customer base comprising blue-chips and our exposure to Indian corporates is already at $1 billion (Rs4,050 crore),” Galatas added.