Bank Of Baroda To Sell Omani Operations To Bank Dhofar

Bank of Baroda said on Thursday it has accepted Bank Dhofar's offer to acquire the banking business of the bank's Oman territory operations.

The acquisition is subject to the approval of the respective regulatory authorities, according to an exchange filing on BSE.

The date for entering the agreement and the consequent expected date of completion of the sale are yet to be decided. As is the consideration received from the sale.

The transaction would not fall within related party transactions. 

Prior to this transaction, the Bank of Baroda had raised Rs 5,000 crore by issuing 10-year infrastructure bonds on Sept. 9, 2024, which was subscribed to by domestic investors. The bond carried a coupon rate of 7.26%.

A similar transaction took place, with the bank raising Rs 5,000 crore through the issue of 10-year infrastructure bonds on Aug. 26, 2024. The bonds had a coupon rate of 7.30%.

The bank had successfully reduced the pricing of its latest offering to 7.26%, which is four basis points lower than the previous issuance. This showed the tightest pricing for an issuance in recent times.

Bank of Baroda had also achieved around 17% compound annual growth rate in loan growth from fiscal 2022 to fiscal 2024 by utilising its excess liquidity, according to a report by Motilal Oswal.

This led to its credit-deposit ratio rising by about 600 basis points over the last two years, reaching 80.3%. The firms expect loan growth to slow to an 11.5% compound annual growth rate from Fiscal 224 to Fiscal 2027, driven by stronger growth in retail, agriculture, and micro, small and medium enterprises sectors.

Shares of Bank Of Baroda Ltd. closed 1.57% lower at Rs 245.05 apiece, as compared with a 2.10% fall in the benchmark BSE Sensex.

It has declined 12.23% in the last 12 months and 5.79% on a year-to-date basis. The relative strength index was at 74.78.

Out of the 35 analysts tracking, 26 have a 'buy' rating on the stock, 8 recommend a 'hold' and 1 suggest a'sell', according to Bloomberg data. The average 12-month Bloomberg analyst consensus price target implies a potential upside of 18.9%.