BoB says buyout on radar, could take place in a year

Bank of Baroda (BoB) is on the lookout for an acquisition.

P S Shenoy, chairman and managing director, BoB, told Business Standard: "It will take at least one year to finalise a deal as a lot of things need to be worked out including the management aspects, swap ratio etc."

The bank is at present assessing synergies including on the human resource and technology fronts among possible targets.

BoB is also awaiting a nod from the Reserve Bank of India (RBI) to enter into life insurance business. Towards this, it is holding talks for a foreign tie up.

"After getting the RBI's nod, we will seek Insurance Regulatory Development Authority approval to start insurance business in India. We are talking with few of the foreign companies, but nothing has been finalised yet," Shenoy said.

Meanwhile, the corpus of the bank's mutual fund arm is expected to grow to Rs 1,000 crore by the end of this financial year. The present asset base stands at around Rs 500 crore. On going for a foreign tie-up, Shenoy said, "We are looking whether the life insurance partner can also become our mutual funds venture ally."

BoB is also planning to enter stock broking by setting up a 100 per cent subsidiary. The subsidiary will be affiliated to both the National Stock Exchange and the Bombay Stock Exchange, he stated.

The bank is also planning to add 150 branches in the next financial year. For the current financial year, the bank is targeting growth of 15 per cent in depository services and 18 per cent in advances. BoB also expects a growth of over 25 per cent in operating profit, while the net profit growth target is 35 per cent for 2003-2004 and 20 per cent for 2004-2005.

"The net non-performing assets of the bank has been reduced to 3.4 per cent and we expect it to be below three per cent by the end of the current financial year with the new Securitisation Act in force," Shenoy said.