Bank of Baroda (BoB) is looking at acquiring a mid-size bank in Africa to grow its international business. It is scaling up its presence in South Africa, Tanzania and Kenya and entering Ghana, a West African country.
“We are open to acquiring a bank in Africa. A mid-size bank (by African standards) has around 20 branches. The decision on the acquisition will depend on synergy” Bank of Baroda Chairman and Managing Director Anil Khandelwal told reporters today after unveiling the plans for the bank’s centenary celebrations.
At present, Africa accounts for over 10 per cent of the bank’s global business. The bank is particularly interested in the retail and the small and medium enterprises (SME) segments, while corporate banking is also on its radar.
On roping in business partners for the credit card subsidiary, BoB Cards, Khandelwal said, “We are looking for a partner, who can provide marketing and technological skills, including back-office support. The bank expects to finalise the decision by the end of December.”
In case, the bank did not find a suitable partner for the card business, it kept the option open to merge the business with itself, he said. The bank’s staff would get incentives to market the credit cards, when the business would be a part of the bank’s regular activity, he added.
The public sector bank has finalised the stakeholding for the proposed life insurance venture. BoB will hold 44 per cent stake, Andhra Bank 30 per cent and the balance 26 per cent will be with the foreign partner, Legal and General Insurance of the UK. It is also looking to enter the general insurance business in centenary year (2008).
The bank expects credit to grow by about 25 per cent every year for the next three years. It has targeted a 50 per cent rise in its business (deposits and advance) to Rs 3,00,000 crore by the end of March 2010. It is also looking at raising a capital of Rs 1,000 crore through subordinated bonds.
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