Bank of India to set up four more overseas arms

Public sector lender Bank of India (BoI), which currently derives 19 per cent of its business from international operations across five continents, is in the process of floating four more subsidiaries abroad – in Uganda, Rwanda, Botswana and Canada.

“We recently opened our subsidiary in New Zealand. With African and other emerging markets being less capital-intensive and high on returns, we are drawing up plans to open four more subsidiaries. Clearances from the Reserve Bank of India are already in place, while talks with the respective governments for regulatory approvals are in advanced stages,” BoI executive director, N Seshadri, told Business Standard.

To expand its overseas balance sheet, the bank had raised some amount through medium-term notes (MTN) in February this year. However, with the markets being not-so-conducive, it is not considering the MTN instrument at the moment, he said.

The bank, at present, is examining the option of a follow-on public offer (FPO) to meet its capital requirements and is holding discussions with the Centre, Seshadri said, adding the government, however, wanted to retain its shareholding of close to 64 per cent in BoI.

“Hence, we are also looking at the possibility of going in for either a rights issue or a qualified institutional placement (QIP),” Seshadri said, while refusing to draw a time line for the proposed capital-raising plans.

To fuel its growth for the next two years, he said, the bank had sought capital to the extent of Rs 4,500 crore, including 67 per cent infusion from the government. “The capital is expected to be in place by the first quarter of the next financial year,” he said.

Seshadri said the bank had recorded a total business of Rs 515,000 crore last financial year, a growth of 23 per cent over the previous year.

“The economy, both global and internally (India), is not very supportive right now. Hence, we expect the growth to be between 15 per cent and 16 per cent this financial year,” he said. The bank would be adding around 400 branches this fiscal to the existing network of 3,760 branches.