Bank of Baroda is closing its New Zealand business

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Bank of Baroda announced on Wednesday its intention to divest its entire 100% stake in its New Zealand operations.

The bank has initiated a process to seek proposals from investment bankers to facilitate this sale, with the deadline for proposal submissions set for October 21, as indicated in a document available on the bank’s official website.

Bank of Baroda (New Zealand) was established as a wholly-owned overseas subsidiary in May 2008 and currently operates through three branches located in Auckland, Wellington, and Manukau.As of March 31, the total business value of Bank of Baroda’s New Zealand branch stood at Rs 994 crore, a significant increase from Rs 108.9 crore recorded two years prior.

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The total loan book size was Rs 581.5 crore as of March 31. It’s important to note that these New Zealand branches contribute less than 0.5% to the bank’s overall consolidated business.

The decision to divest from overseas locations aligns with Bank of Baroda’s strategy, along with other public-sector banks, to enhance cost efficiency and overall profitability.

This move is part of the Union government’s broader initiative for clean and responsible banking, which was launched in 2017.

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In recent developments, last December, the state-owned bank authorized the sale of its majority stake in Nainital Bank and relinquished control, with Bank of Baroda currently holding a 98.57% stake in Nainital Bank.

Additionally, in March, the bank approved the divestment of up to 49% of its shareholding in its credit card subsidiary, BoB Financial Solutions Ltd.

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