Financial Daily from THE HINDU group of publications
Thursday, Jun 16, 2005
Public Sector Banks
Money & Banking - Life Insurance
BoB plans joint venture for life insurance foray To tap capital market in Sept
The Union Finance Minister, Mr P. Chidambaram, with the Chairman and Managing Director of Bank of Baroda, Dr Anil K. Khandelwal, in the Capital on Wednesday. - Kamal Narang
New Delhi , June 15
BANK of Baroda (BoB) plans to foray into life insurance business through the joint venture route.
It is also looking to rope in a foreign partner, which could take a 26 per cent stake in the new venture.
"We are exploring the possibility of entering the life insurance business. The entry would be through a joint venture," Dr Anil K. Khandelwal, Chairman and Managing Director, BoB, told reporters on the sidelines of a function organised for the simultaneous launch of 201 inter-connected ATMs spread across 108 centres in the country.
Indications are that BoB would partner with another bank besides a foreign player for the foray. "We are looking at both domestic as well as foreign partners for the proposed venture. The idea is to give 26 per cent stake to the foreign partner and the remaining could be from us and another bank," Dr Khandelwal said.
He ruled out the adoption of acquisition route for entering into the life insurance business.
Meanwhile, Dr Khandelwal said that Bank of Baroda would tap the capital market with a public issue in September. "We will offer 7.1 crore shares of face value of Rs 10 each at a premium. The issue would be a book-built issue and the Government holding in the bank would come down from 66.83 per cent to 53 per cent after the issue."
On the operational performance of the bank, he said that the bank was targeting a 30 per cent growth in credit during the current fiscal.
As far as the treasury income was concerned, he said that the market was "tough" during the current year.
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