Bank of Baroda to shut Hong Kong branch, Thailand office

Bank of Baroda (BoB) is scaling down its overseas presence as part of a rationalisation process. It is planning to shut down a branch in Hong Kong and a representative office in Thailand.

A senior bank executive said as Hong Kong was the financial hub of Asia it remained a key business centre for the bank and it would continue to strengthen its presence with the remaining branch.

BoB started its Hong Kong operations as a joint venture (JV) or deposit-taking company named IBU International Finance, with two other banks on August 18, 1980. In 1999, it took over the shares of its JV partners.

The bank got a full-fledged banking licence from the Hong Kong Monetary Authority (HKMA) in August 2006. The entire deposits and advances portfolio of Bank of Baroda (Hong Kong) was taken over by BoB in April 2007.

The executive quoted above said besides Southeast Asia, the bank has put operations in Africa under scanner. “In some cases, the decision on our presence is subject to the priorities of the Government of India, keeping in mind relations with a country,” he added.

At the end of September 2017, BoB had 59 branches in 15 countries and eight subsidiaries having 47 branches, one JV, and one associate with 31 branches.

During Q2FY18, the bank’s international business contributed 24.98 per cent to BoB’s total business. The total global business at end of September 2017 was Rs 2.4 lakh crore, with deposits of Rs 1.35 lakh crore and net advances of Rs 1.06 lakh crore.

Hit by resource crunch, especially capital, many public sector banks are reviewing their international operations to rationalise and close down some of the branches.

Many of them have established presence to support expansion of Indian business abroad and also serve ethnic Indian population. But over years the business dynamics has changed. The global environment remains subdued.

Government of India’s push to prepare turnaround plans after it announced a Rs 2.11-trillion capital-infusion programme has also enticed them to relook at their overseas business operations.

The consolidated balance sheet of banks with cross-border presence, including overseas subsidiaries, contracted during 2016-17, reflecting tepid global economic activity.