KOLKATA: Bank of Baroda (BoB) is shifting to top gear. While it plans to introduce wealth management services and a stock-broking platform by December this year, the leading public-sector bank is in advanced talks with foreign and Indian players for setting up its standalone life insurance venture and for refurbishing its existing asset management company.
It proposes to raise about Rs 1,000 crore of capital through various instruments, including perpetual bonds and upper tier-2 bonds.
It is also weighing options to raise some capital from foreign shores following recent RBI guidelines allowing banks to tap overseas markets for upper tier-2 capital.
“The aim is to convert the bank into a retail organisation. This radical transformation will entail restructuring our subsidiaries as well. BoB is in talks with players for BoB Cards, BoB AMC and for an insurance venture,” A K Khandelwal, chairman and managing director, BoB, said.
The bank is in the process of merging its housing subsidiary and Nainital Bank where it holds almost 98%, with itself.
“In our efforts to restructure and bring in new concepts, the bank will have designated branches. All branches cannot transact all activities equally well all the time. For example, there will be specific branches for corporate, SME or housing in the coming months. The idea is also to provide credit without hassles,” Khandelwal said.
BoB, with a presence in 20 countries, plans to be present in 10 new destinations this year.
It has applied for RBI permission for transacting business in places including New Zealand, Australia, Kuwait, Qatar, Ghana, Bahrain, Mozambique apart from Canada, for which it may apply for consent. Proposed branches in Singapore and Port of Spain are likely to be opened this fiscal.
Foreign business for the bank has grown by 40% in 2005-06 and the bank has targeted for a 45% growth this financial year. Almost 28% of the BoB’s net profit come from its foreign operations. This is likely to go up to about 35% in the next 2-3 years, the CMD said.
