Bank of Baroda : In a strategic move aimed at optimizing its global operations, the Bank of Baroda has announced its intention to divest its entire stake of 100% in its New Zealand business. This decision comes as part of the bank’s ongoing efforts to streamline its overseas presence for enhanced cost-efficiency and profitability.
Bank of Baroda (New Zealand), established as a wholly-owned overseas subsidiary in May 2008, currently operates from three branches located in Auckland, Wellington, and Manukau. The bank’s total business in New Zealand stood at Rs 994 crore as of March 31, a significant increase from Rs 108.9 crore just two years prior. Meanwhile, the total loan book for the New Zealand business was reported at Rs 581.5 crore as of March 31.
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Despite this growth, the three New Zealand branches contribute less than a percentage to the bank’s consolidated business. This divestment decision aligns with the broader trend among public-sector banks, including Bank of Baroda, to rationalize overseas branches and focus on core markets. The move echoes the Union government’s clean and responsible banking initiative launched in 2017, which aims to enhance the efficiency and sustainability of public-sector banks.
To facilitate the sale, the Bank of Baroda has invited proposals from investment bankers, with a submission deadline of October 21, as disclosed in an exchange filing. This move signals the bank’s commitment to ensuring a smooth transition and achieving optimal value from the sale of its New Zealand subsidiary.
This divestment decision follows a series of strategic moves by the Bank of Baroda in recent months. In December of the previous year, the state-owned bank authorized the sale of its 98.57% stake in Nainital Bank, and in March, it approved the divestment of up to 49% of its shareholding in its credit card subsidiary, BoB Financial Solutions Ltd.
As the bank continues to adapt to changing market dynamics and evolving regulatory frameworks, the sale of its New Zealand business marks another milestone in its ongoing efforts to position itself for long-term growth and sustainability.
At the time of writing, shares of Bank of Baroda were trading 0.02% higher at Rs 213.70 apiece, compared to a 0.46% decline in the benchmark NSE Nifty 50 as of 10.50 a.m. This development will undoubtedly be closely monitored by investors, industry analysts, and stakeholders alike as the bank progresses with its divestment plans.
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