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BANKBARODA - Bank Of Baroda News Story

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India's Bank of Baroda to seek investor in credit card business, says CEO

Tue 9th March, 2021 12:07pm
By Nupur Anand
    MUMBAI, March 9 (Reuters) - Indian lender Bank of Baroda
 BOB.NS  will look for an investor in its credit card business
while it also considers a potential listing for its insurance
joint venture in the next 18 to 24 months, its chief executive
told Reuters.
    The moves flagged by Sanjiv Chadha late on Monday are part
of efforts by the state-owned bank to strengthen its position in
a post-pandemic world, with global consultancy firm McKinsey &
Co hired to help it to execute broad transformation plans. 
    "We may look at getting an investor into the cards business
in the next 12 months," Chadha said of its BoB Financial
Solutions operation.
    The business, set up in 1994 to house the bank's credit card
portfolio, is a wholly owned subsidiary that offers more than
half a million customers a range of Visa and Mastercard-linked
card options. 
    "We are also looking to explore the possibility of listing
IndiaFirst Life Insurance Co in the next 18-24 months as the
business has been doing very well and we believe it has
significant value," Chadha said.
    Bank of Baroda has a 44% stake in the insurance company,
with Union Bank of India  UNBK.NS  holding 30% and Carmel Point
Investments 26%.
    The previously flagged sale of Bank of Baroda's 40% stake in
India International Bank Malaysia Berhad (IIBMB) remains a work
in progress, said Chadha, who took the helm in January last
    Bank of Baroda is also looking at using excess capital from
international operations to bolster its domestic business, where
returns are higher.
    "We're looking at where the return is sub-optimal and are
looking at redeploying that capital back to India," Chadha said,
adding that the bank has no plans to raise capital for at least
a year after a 45 billion rupee ($617 million) capital increase
this month. 
    While the bank plans to keep the size of its branch network
largely unchanged, it does plan to set up a network of agents to
offer banking services at locations other than its existing
branches or ATMs, Chadha said, adding that this is unlikely to
involve any dramatic change in the size of its workforce.
    "We are trying to look at how we staff the bank as we move
forward," Chanda said. 
    "We are exploring hiring people on contract to increase feet
on street, how people can work in a hybrid model or work from
home, among other things."
($1 = 72.9330 Indian rupees)

 (Reporting by Nupur Anand
Editing by David Goodman)
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