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BoI likely to buy foreign bank by May

BoI likely to buy foreign bank by May
PTI
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First Published: Mon, Feb 11 2008. 04 26 PM IST
Updated: Mon, Feb 11 2008. 04 26 PM IST
Mumbai: State-owned Bank of India may acquire a mid-sized foreign bank in the next 2-3 months, as a part of strategy to increase its global footprint, a senior bank official said.
“We are mulling the acquisition of a mid-sized bank overseas. This is likely to take place in next 2-3 months,” the official said.
BoI recently completed a Qualified Institutional Placement (QIP) of Rs1,360 crore, in which it issued 3.78 crore shares at a price of Rs360 per share.
With the QIP, the government’s holding in the bank will come down to 64.47% from the earlier 69.47%.
BoI currently has 25 foreign branches in 13 countries, and plans to grow bigger in the global market through the acquisition, the official said.
“We are considering all geographies to identify the right target,” the official said.
The bank is also scouting for a partner for its proposed mutual funds business. BoI will appoint a consultant in the next one month. “We are likely to select our partner by mid-this year,” the official said.
With a total networth of Rs8,116 crore and a comfortable capital adequacy ratio of 13.85%, BoI is amongst the leading players in the country’s banking sector.
The bank has also tied-up with another public-sector giant Union Bank of India (UBI) and Japanese firm Dai-Ichi for its proposed insurance venture in India, in which BoI holds a 51% stake.
“We expect this (insurance JV) to be operational in another three months. A new office will be set up for the venture and is set to operate from Mumbai,” the official said.
BoI is also seeking a partner for its credit cards business with a view to strengthen its position in the highly-competitive segment, the official said.
BoI is the first state-owned bank in the country to opt for the QIP route to raise capital, while two other PSBs -- Uco Bank and Syndicate Bank -- are also understood to be mulling QIPs to meet their capital requirements.
The bank has already a strong international presence including in major global destinations such as UK, where it has six branches.
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First Published: Mon, Feb 11 2008. 04 26 PM IST