BoB is scouting for the acquisition of a local bank in Kuala Lumpur to be able to hit the ground running when the Malaysian JV is launched later this year.
HYDERABAD: Bank of Baroda (BoB), which has proposed a Malaysian subsidiary in alliance with the Punjab National Bank (PNB) and Andhra Bank, is looking to speed up its business rollout in that country through the inorganic route. Senior officials at partner Andhra Bank told DNA Money that BoB was scouting for the acquisition of a local bank in Kuala Lumpur to be able to hit the ground running when the Malaysian JV is launched later this year.
The Reserve Bank has already approved the proposal for the 40:35:25 JV between BoB, PNB, and Andhra Bank, respectively, K Ramakrishnan, CMD, Andhra Bank said on Monday.
BoB has a representative office in Kuala Lumpur and is in the process of getting regulatory approvals from the local authorities to begin operations of the proposed bank, which is yet to be named, said Ramakrishnan.
However, the proposed JV is also actively seeking the takeover of a Malaysian bank as it will speed up ramp-up of the new bank, Kalyan Mukherjee, executive director, Andhra Bank, said on the sidelines of a press meet to announce the annual results of the bank. “The due diligence process will take some time as the proposal is still in its early stages,” he said.
Sources said the JV will have a capital base of 300 million Malaysian ringgits (Rs 360 crore) and is looking to have three branches in the country by the end of the third year.
Going by the current business plan, the JV should break even by the end of the third year. The venture comes even each of the three banks is pursuing aggressive overseas expansion plans on its own. While Andhra Bank recently opened its first representative office in Dubai, it has received permission from RBI to open offices in Riyadh, Kuwait, and New Jersey.
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