The Hindu Business Line : BoB charts new global biz strategy

Country-specific approach
The bank will follow a mix of retail and wholesale business, aggressive marketing with innovative products and delivery channels.

Mumbai , Jan. 11

Bank of Baroda, the fourth largest public sector bank in terms of business, is reworking its growth strategy to pull off a 50-per cent increase in overseas business over the next three years.

Foreign branches now contribute to more than 18 per cent of the bank's total business and 35 per cent of profit.

The bank had reported a net profit of Rs 288.36 crore for the six-month ended September 30, 2006. Its total business on that date was Rs 1,26,555.81 crore.

The Chairman, Dr A.K. Khandelwal, who describes Bank of Baroda as India's international bank, expects foreign operations to contribute 20 per cent of business and 40 per cent of profit by end of this fiscal.

As part of the new global business strategy, the bank will create four overseas hubs in London, Hong Kong, Johannesburg and Dubai. This, according to Dr Khadelwal, will help a better reporting system for the overseas branches.

The bank will follow a country-specific strategy, a mix of retail and wholesale business, with innovative products and delivery channels, he said.

While most of the overseas growth is expected to come from the UAE and the UK, the bank is also expanding its geographical reach to 10 more countries, Dr Khandelwal told Business Line.

"We have 53 years of experience in international banking, but we have not been able to tap its full potential. With India Inc increasingly going global, banks like BoB will have more and more opportunities overseas," said Dr Khandelwal.

Deposits up

He said overseas deposits grew from $3.275 billion as on March 31, 2006, to $4.237 billion as on September 2006 and credit from $2.166 billion to $2.809 billion.

This was done by aggressive marketing, product innovations, a mix of retail and wholesale business and adopting a country-specific strategy, said Dr Khadelwal.

At present, the bank operates in 21 countries with 40 branches and 20 subsidiaries and representative offices.

Innovative services

In the UK, where the bank will be celebrating its 50 years of operations later this month, has received the licence for theninth branch. It has started its global syndication centre in London recently.

In the UAE, where it has six branches, the bank would be launching innovative services such as mobile banking and doorstep banking to garner more retail business like fund remittance.

Expansion plans

BoB has got two licences for electronic banking in Jebel Ali Free Trade Zone and is starting a regional syndication centre in Dubai. In GCC countries, it has also received approval for offices in Oman, Qatar and Bahrain. It has also applied for permission for a branch each in Kuwait and Saudi Arabia.

After being present in East Africa for the last 53 years, BoB has now got licences for Ghana and Mozambique and is also exploring the possibility of operations in Senegal, Dr Khandelwal said.

Trinidad and Tobago, Canada, Australia, New Zealand and Isle of Man, are the other countries the bank is planning to expand. It is also planning to upgrade its representative office in Guangzhou to a branch and open a second rep office in Hangzhou in China. It will also convert its subsidiary in Hong Kong to a full-fledged branch.

For BoB, the overseas growth has so far been organic. "We are not keen to acquire banks for the sake of acquiring. But we are not averse to exploring the opportunities in Africa," Dr Khandelwal said.

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