Bob To Set Shop In Malaysia, Tanzania

Bank of Boroda (BoB) plans to expand its overseas operations. The bank is in the process of setting shop in Malaysia and Tanzania and expanding its presence in the US where it has only one branch so far.

In a parallel development, the bank is foraying into the syndicated loan market which has so far been dominated by a few foreign banks and the State Bank of India. "Earlier, BoB used to participate in loan syndications. Now, it is taking the syndicated loans in its own books and selling them off at a later stage," said a market source.

Last month, the bank extended a $100 million long-term external commercial borrowing (ECB) to IFCI to help it redeem its floating rate notes (FRN) on August 19. In addition, BoB raised $200 million from Indian Oil Corporation and bagged the mandate to arrange another $50 million for Exim Bank.

 

The IOC facility has a life time of two years while the Exim loan is for five years. BoB has set up a global syndication hub in London which coordinates all overseas loan syndications.

In a major overhauling of its overseas business strategies, BoB is now focusing on personal banking, trade finance and the retail business. The bank is also refurbishing its delivery channels by offering facilities like web-enabled products, ATMs and credit and debit cards which were not offered earlier overseas.

BoB has so far 38 branches spread across the UK, Bahamas, UAE, Mauritius, Belgium, Fiji, USA, Oman, Seychelles and South Africa. The combined net profit of these branches was to the tune of Rs 113.2 crore for fiscal 2002 and the percentage of non-performing assets (NPA) to total assets was 0.56 per cent.

Besides these branches, BoB has 23 subsidiaries and joint ventures overseas in Botswana, UK, Guyana, Hong Kong, Kenya, Uganada and Zambia. The combined net profit of these ventures was to the tune of Rs 39.7 crore in fiscal 2002.

Collectively, BoB's overseas operations account for over 25 per cent of the bank's net profit. In 2002, BoB posted a net profit of Rs 572.84 crore.