Kotak Mahindra Bank has been identified as the preferred bidder to acquire Deutsche Bank’s retail operations in India, reported Economic Times (ET).

The transaction, valued at approximately Rs 45bn ($480m), could be finalised and made public in the coming week, sources said.

The acquisition would include a portfolio of retail loans and deposits amounting to about Rs 270bn.

This covers personal and home loans, lending to micro, small and medium enterprises (MSMEs), retail deposits, and wealth management assets.

Of this portfolio, wealth management accounts for an estimated Rs 70bn, but most of the assets are reported to be in retail and MSME loans, the report said.

Those briefed on the matter stated that Kotak Mahindra’s offer slightly exceeds the difference between Deutsche Bank India’s assets and liabilities in this business, which stands close to Rs 43bn.

The bank is understood to have outbid Federal Bank for the deal.

In January it was reported that Kotak Mahindra Bank and Federal Bank submitted binding offers for the portfolio, according to Bloomberg.

A final agreement is subject to closing adjustments.

Emails sent to Kotak Mahindra Bank and Deutsche Bank seeking comment did not receive a response by Sunday evening.

Deutsche Bank operates around 17 branches in India, catering mainly to affluent clients.

The potential sale of its retail business is part of a wider restructuring effort by Deutsche Bank CEO Christian Sewing, who aims to concentrate on core areas and improve profitability globally, the news publication added.

Kotak Mahindra previously purchased a personal loan portfolio from Standard Chartered.

"Kotak Mahindra nears deal to buy Deutsche Bank’s India retail unit – report" was originally created and published by Retail Banker International, a GlobalData owned brand.

 

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