BoB firms up overseas spread plan

On the lines of State Bank of India and Bank of India, another state-run player Bank of Baroda (BoB) is looking at overseas markets keenly.

In 2006, BoB is planning to expand its footprint from 19 to 25 countries. Unlike the other two, BoB is aiming to grow only organically since it finds inorganic growth too expensive.

BoB has applied to the Reserve Bank of India (RBI) to open its first branches in Bangladesh, Canada, Maldives, New Zealand, Sri Lanka, Trinidad and Tobago, and Singapore.

Rather large plans have been drawn up for Singapore. The bank will have an offshore branch there which will serve as a hub for the bank's proposed Asia-Pacific operations.

The bank will arrange loan syndications through this outfit. BoB raised $100 million through the loan syndication route in December for its overseas operations and plans another $150 million fund raising programme in the coming fiscal.

BoB has also applied for more branches in the UAE, US and UK. This will be BoB's seventh branch in the UAE.

In the US, it has a branch in New York and is awaiting US authorities' approval for one in Houston, Texas. In the UK, BoB will be restarting its operations in Leicester where it had shut shop some 12 years back.

"We see a lot of potential for business from these markets. We are targetting the SME business which is into export and import and the NRIs pockets. In African countries, we have noticed that a large chunk of our business comes from the local populace," said A S Khurana, general manager, international banking and treasury operations, BoB.

The bank is currently holding a two-day meeting of its top management from its overseas operations in Mumbai to chalk out future strategies and business plans for 2005-06.

BoB with 57 offices in 19 countries and one joint venture has an overseas balance sheet of $3.2 billion. International operations contribute about 15 per cent to BoB's overall business and 20 per cent to its profits.

Compare this with Bank of India which has just 21 offices and one joint venture overseas which brings in a handsome 21 per cent of total business and 16 per cent of profits.