BoB eyes acquisition, mergers for growth

Bank of Baroda (BoB) is eyeing mergers and acquisitions to consolidate its position among the top-ranked public sector banks in the country by 2008.

The bank's second public offering, to raise Rs 1,500 crore and enhance its capital adequacy ratio to over 15 per cent from the present 13.9 per cent, is expected to hit the market within the next two months.

"At present, we have a one-point agenda to make Bank of Baroda the number one among all banks in the country by 2008, when the bank celebrates 100 years of its operations," said Anil Khandelwal, chairman and managing director, at a felicitation programme held in Ahmedabad last week.

"Things are changing very fast in the Indian banking industry, with regards to technology and customers expectations. We will not let down our customers," he said.

The bank is actively planning for acquisitions of mid-sized banks overseas to fuel its next level of growth. Khandelwal said, "The bank has a presence in Kenya, Uganda and Mauritius and we would continue that legacy to emerge as a truly global bank."

However, he refused to divulge the name of international banks that BoB was eyeing.

"The bank has already received the highest AAA rating from major ratings agencies, including Crisil. Foreign institutional investors (FIIs) also have rated the bank highly. BoB is among the few public sector banks in the country, in which FIIs have invested the maximum permissible limit of 20 per cent," Khandelwal said.

"There are area of reforms and weakness to be sorted out. I will have to be human resource manager in the role of a chairman. There are over 2,800 branches of the bank across the country with 2,800 branch managers. This is the biggest challenge before me. My role would be like a quasi banker with a full-time HR role."