Bank of Baroda chairman and managing director Anil K. Khandelwal in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, Aug. 29: Bank of Baroda plans to buy National Housing Bank’s 33 per cent stake in BoB Housing Finance in the current financial year.

The bank holds a 67 per cent stake in its housing division and wants to make it a wholly-owned subsidiary.

“The valuation has already been carried out and we will take a decision soon,” chairman and managing director Anil K. Khandelwal said.

However, Khandelwal refused to reveal the valuation of National Housing Bank’s shares in BoB Housing Finance.

The housing subsidiary has an asset base of Rs 600 crore. It has regularly paid dividend to Bank of Baroda and skipped it only in the last financial year.

Khandelwal added that the bank is also drawing up plans to beef up the operations of its three other Indian subsidiaries ? BoB Asset Management, BoB Capital and BoB Cards.

“We are working on what to do with BoB Asset Management,” he said. Asked whether the bank will invite a strategic investor as the State Bank of India has done for SBI Mutual Fund, Khandelwal said, “I cannot comment now.”

The bank hopes to double the business of BoB Cards. The card subsidiary has issued 1.5 lakh cards till date.

BoB has received an approval from the government to issue 7.1 crore shares as part of its second public float. Post-issue, the government holding in the bank will come down to 58.30 per cent from 66 per cent.

Khandelwal refused to comment on the second float as Sebi guidelines bar him. The capital adequacy ratio of the bank is 12.61 per cent.

On Basel-II norms, he said the bank would take care of the capital as and when required.

BoB, which plans to expand its international wing, has received permission from the Reserve Bank of India for opening branches and representative offices in Canada, New Zealand, Bangladesh and other areas. The bank is eyeing a 15 per cent growth in international business.

It is also opening a subsidiary in Malaysia along with two other banks ? Oriental Bank of Commerce and Bank of Maharashtra.

BoB will hold a 40 per cent stake in the joint venture and the other two banks will hold 30 per cent each.

The bank is targeting a 25 per cent growth in credit and 18 per cent in deposits in the current financial year. BoB did business worth Rs 1.25 lakh crore in 2004-05. Of this, 45,000 was in advances and the rest was deposit.