Bank of Baroda seeks bankers for sale of Guyana-based subsidiary

PS Jayakumar, managing director and chief executive officer, BoB, has also spoken of tapping into some prominent Asian markets.

Bank of Baroda seeks bankers for sale of Guyana-based subsidiary

As a strategic move, BoB has announced plans to focus on four overseas territories — the US, the UK, the United Arab Emirates (UAE) and Singapore.

Bank of Baroda (BoB) on Thursday sought bids from investment bankers to carry out the sale of its Guyana-based subsidiary. “The objective of this assignment is to sell/disinvest Bank of Baroda’s entire 100% stake in its subsidiary BOBGI (Bank of Baroda Guyana Inc) through investment bankers,” BoB said in a bid document.
The Guyana subsidiary’s total business stood at GYD 14,560 million (nearly $70 million) at the end of September 2018, down from GYD 20,576.5 million at the end of March 2017 and GYD 21,092 million at the end of March 2016.
The sale is part of a strategy to exit relatively less remunerative international markets by BoB, which continues to call itself ‘India’s international bank’. Part of the impact was a result of a regulatory restriction on issuance of letters of undertaking (LoUs), which shrunk the international portfolio of the bank to `19,000 crore from `38,000 crore over the April-June quarter of FY19. The contribution of international business to the bank’s balance sheet fell to 23% from 27%. In February, the bank had decided to move out of South Africa in the wake of allegations that it facilitated money laundering by a non-resident Indian family in the country.

As a strategic move, BoB has announced plans to focus on four overseas territories — the US, the UK, the United Arab Emirates (UAE) and Singapore.

PS Jayakumar, managing director and chief executive officer, BoB, has also spoken of tapping into some prominent Asian markets. “The bank is trying to look east a little bit. We have done some kind of an alliance with a leading Korean bank,” he had said in July. “They are all new markets that we need to look at, such as Korea and Japan, where there is a large amount of business going through.”
That might signal a gradual move out of the bank’s six subsidiaries in Africa, one in Trinidad and Tobago and another in New Zealand. BoB is set to be amalgamated with smaller peers Dena Bank and Vijaya Bank by the end of FY19 as part of the government’s plan to tackle a persistent asset quality problem at banks owned by it.

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