Bank of Baroda will rebalance its international portfolio to improve profitability of its overseas operations, its recently appointed Chairman and Managing Director, S. S. Mundra, has said.
Currently, this public sector lender has 98 outlets in different countries, accounting for about 25 per cent of the bank’s profits in a financial year.
As much as 30 per cent of the bank’s overall business comes from international operations. BOB will soon open a full-fledged branch at Dubai International Financial Centre.
The aim is to enhance the share of international operations to overall profit of the bank to 30 per cent, from the current 25 per cent, said Mundra, who assumed charge of his new role in end-January.
Mundra, who will have a limited tenure at the helm of BOB (he will retire in mid-2014), made it clear that he will not look for aggressive topline growth in international operations in the present global economic scenario.
BOB would aim for more fee-based earnings to improve the profitability of international operations.
“There is lot of scope to rebalance the portfolio in international operations to further improve the profitability from overseas operations,” Mundra told Business Line in an interview during his visit to the Capital on Saturday.
‘Premium on continuity’
Mundra, who called on the Finance Minister P. Chidambaram at the latter’s office on Saturday, said there would be a “premium on continuity” at the bank during his tenure.
“The bank is doing very well. No need for suddenly changing the course. If the bank had not been doing well, there is a need for revamp”.
At the same time, he admitted that in the last two quarters the bank had seen some strain in loan quality in the backdrop of slowdown in India and difficult economic conditions abroad.
“We will enhance our focus on asset quality and recovery,” he said.
Given that the industrial sector is seeing a slowdown, BOB also wants to slightly rebalance the domestic portfolio by leaning more towards MSME (micro, small and medium enterprise) and retail sectors.
HR focus
Mundra also said that he would to continue focus on human resource issues and create a leadership pipeline at the middle- and senior-management levels.
To bolster the supply of entry level staff, BOB entered into a tie-up with Baroda Manipal Institute a few years back.
Plans are now afoot to get into similar tie-ups with other institutions as well, Mundra said, adding that the Baroda Manipal arrangement would be strengthened further.
Public sector banks are faced with a huge HR challenge as a large percentage of senior management are coming out of the banking system because of superannuation.
Srivats.kr@thehindu.co.in