BOB looks to sell 2 international units

MUMBAI: Bank of Baroda (BOB) is looking to sell its offshore subsidiaries in Ghana and Trinidad and Tobago, as part of a strategy to rationalize international operations, according to two bankers familiar with the matter. This is the first attempt by any stateowned bank to sell its international units.

Bank of Baroda has already sent the request for proposal (RFP) to its 10 empanelled investment bankers, said the people cited above. The two subsidiaries’ total business constitute less than ₹1,000 crore.

Both Bank of Baroda (Ghana) Ltd and Bank of Baroda (Trinidad and Tobago) Ltd run three retail branches, each. “Some of these subsidiaries are not performing as per expectation. Hence, we decided to exit,” said the first banker, requesting anonymity.

“Unlike Uganda and Kenya, which are both listed subsidiaries, Ghana and T&T are not core to our business.” In June, Bank of Baroda had closed down its Bahrain and Nasau branches, and is currently in the process of closing its Bahamas branch.

According to a July 23 Indian Express report, public sector banks (PSBS) have shut 37 overseas branches and are expected to close down another 70 by the end of the year, following the government’s roadmap on rationalizing banks’ foreign operations.

An email query to Bank of Baroda did not elicit any response.

Earlier, Bank of Baroda was forced to shut operations in South Africa after its loans to companies owned by three Indian origin businessmen—brothers, Ajay Gupta, Atul Gupta and Rajesh Gupta—who were considered close to former South Africa president Jacob Zuma, came under the scanner for alleged moneylaundering.

Such incidents, along with the need to preserve capital at a time when state-run banks are struggling with high levels of debt and low profitability, has prompted the government to kick start the rationalization process.