BoB finalises bank buyout plan

Bank of Baroda (BoB) has decided in principle to acquire a bank. Divulging the bank's intention, chairman and managing director of the bank P S Shenoy today said BoB would ideally acquire a bank which has strong local presence in areas where the bank does not have a major presence.

BoB also hopes to make an announcement in this line by 2006. Possibilities were that the process would be initiated by the end of the fiscal.

"We are a strong player in the west and would look at smaller banks with strong presence in east, north and south to emerge a pan India bank with strong presence all over the country," said the chairman.

Citing examples, Shenoy said bank's like Punjab National Bank, Corporation Bank and Allahabad Bank which were strong in their respective locations. Shenoy, however, did not rule the possibility of merging more than one bank with itself.

On the number of branches BoB was looking at through acquisitions, Shenoy said, "A presence in each commercial location would be the priority, but there was bound to be overlapping which we would merge," he said.

Citing the example of State Bank of Saurashtra (SBS) which they tookover, Shenoy said of the 106 branches that SBS had, as many as 40 branches were merged with BoB.

Talking about takeover candidates and their consideration, Shenoy said: "We would be looking at synergies on the basis of geographical location and culture match."

"With Basel-II, the size of a bank is critical and in principally there is a thinking in this line," he added.

Meanwhile, the bank has also initiated the process of merging its housing finance arm with itself.

At present the due diligence process is on and BoB is negotiating with the National Housing Bank (NHB) for buying out its 30 per cent.

"The process of merger is likely to be complete this year or the first part of the next fiscal," he added.