Government-owned Bank of Baroda (BOB) plans to acquire a bank in Malaysia by the middle of next year. BOB is the third public sector bank, after State Bank of India and Punjab National Bank, to flesh out acquisition plans abroad.
A senior bank official, connected with the development, said an acquisition is necessary as the rules for opening of branches of foreign banks are restrictive in both Malaysia and Thailand. An acquisition is, therefore, an only option to operate at a deeper level in the financial markets in these countries. The official also said the plan would be finalised in the first quarter of the next financial year.
BOB is in the process of identifying the takeover targets in both the countries. BoB is also setting up a joint venture in Malaysia with two other state-owned banks - Andhra Bank and Indian Overseas Bank. It is planning to invest Rs 160 crore towards its 40% stake in the Malaysian subsidiary India BIA Bank Malaysia to be floated as a joint venture with 35% and 25% stakes from Indian Overseas Bank and Andhra Bank, respectively. The new venture would be operational by year-end.
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