BoB to beef up overseas revenue

Bank of Baroda (BoB) has lined up massive overseas expansion plans in a bid to increase the share of its overseas business to around 20 to 22 per cent within the next three years.

Anil K Khandelwal, chairman and managing director, BoB, said, "We will be shortly applying to RBI for opening branches in Mozambique, Qatar, Ghana, Johannesburg, Bahrain and Kuwait. Meanwhile, we have obtained approval to open branches in New Zealand, Australia and Maldives."

The target is to foray into ten new countries within the next three years, he added.

BoB would be shortly opening its Singapore branch, while it was waiting for clearance from the local authority for its branch in West Indies, he said.

"Last year, 16 per cent of the bank's total business and 28 per cent of the net profit had come from overseas operation. Our target is to take the corresponding figures to 20 to 22 per cent and 30 to 35 per cent respectively within the next three years," he disclosed.

The bank is eyeing a 45 per cent growth in overseas business this year. On the domestic front, the bank is all set to refurbish its subsidiary and associate institutions.

"We are looking for a foreign partner for BOBCARDS Ltd. We are also at an advanced stage of finalising a foreign partner in BOB Asset Management Company. BoB will be offloading its stake in these subsidiaries, but the exact modalities are yet to be finalised," he added. BoB is in an advanced stage of discussion with its foreign partner for its life insurance foray.

"We are in final stages of talks with a foreign player for life insurance venture. We are also talking to a few Indian institutions for the same," noted Khandelwal.

He further confirmed that all the major changes pertaining to refurbishing its subsidiaries, associate bank merger and insurance foray would be visible within the next three months.

The Nainital Bank Ltd, where BoB holds 98 per cent stake, would also be merged with BoB within the next six months, he hinted.

Meanwhile, the legal merger of BOB Housing Finance with BoB is under process.

Khandelwal said, "Besides organic growth, we are open to acquisition options both within the country and overseas, especially in the areas where we are strong, like East Africa."

Meanwhile, the bank has plans to raise an additional capital of Rs 1,000 crore through a combination of perpetual bonds, upper Tier-II bonds, including $100 million in foreign currency, he noted.

He also informed that currently 330 branches were on core banking solution (CBS) platform that would be raised to 550 this September and to 1,000 branches by March 2007.