Shares of private lender Kotak Mahindra Bank will be in focus heading into trade on Wednesday after it signed a definitive agreement to acquire the retail banking, private banking and wealth management business of Deutsche Bank in India for Rs 282 crore, in what is among the largest portfolio acquisitions in the country's financial services industry in recent years.
As part of the transaction, Kotak Mahindra Bank will acquire a portfolio that includes nearly Rs 29,000 crore (around €2.7 billion) of loans, Rs 16,000 crore (around €1.5 billion) in deposits and Rs 10,500 crore (around €1 billion) in assets under management (AUM).
The acquisition will also add approximately 1.5 lakh customers to Kotak Mahindra Bank's franchise, along with nearly 1,000 employees currently associated with the business. The financial terms of the deal were not fully disclosed.
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The transaction is expected to be completed by September 2027, subject to approvals from regulators, including the Competition Commission of India, as well as other customary closing conditions. Once the deal is completed, it is expected to be return-on-equity (ROE) accretive for Kotak Mahindra Bank and common equity tier-1 (CET1) accretive for Deutsche Bank.
The acquisition is set to strengthen Kotak Mahindra Bank's retail banking business by expanding its presence across home loans, personal loans, MSME lending, deposits and wealth management.
Deutsche Bank's retail banking business in India operates through about 17 branches and has established a niche position among affluent customers. The transaction gives Kotak Mahindra Bank immediate scale in the premium banking segment.
For Deutsche Bank, the sale is in line with its global strategy of simplifying operations and increasing focus on its core businesses under Chief Executive Christian Sewing. The German lender has been gradually scaling down its retail banking business in India as part of this broader strategy.
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Commenting on the acquisition, Kotak Mahindra Bank Managing Director and CEO Ashok Vaswani said the transaction is well aligned with the bank's strategy of strengthening its presence in the affluent and SME segments. He described the deal as a strong strategic fit that also makes commercial sense, adding that it brings a high-quality customer franchise, experienced teams, greater scale and opportunities to expand into adjacent businesses.
Deutsche Bank Group India and Emerging Asia CEO Kaushik Shaparia said the transaction represents an important milestone in the bank's strategy to streamline its portfolio and focus on businesses where it has scale, strengths and the ability to generate sustainable returns. He added that India's increasing integration with the global economy continues to reinforce its importance as a core market for Deutsche Bank.
Kotak Mahindra Bank has previously acquired Standard Chartered's Rs 3,330-crore personal loan portfolio, while Axis Bank's acquisition of Citibank India's consumer business in 2022 remains one of the sector's most significant deals.
