Deutsche Bank’s $2.5 billion India retail assets draw final bids

(Bloomberg) — Deutsche Bank AG’s India retail assets and asset management, Kotak Mahindra Bank Ltd. and received binding offers from Federal Bank Ltd.

Sources, who requested anonymity because the talks are private, said that the suitors are in advanced talks with Deutsche Bank for assets whose book size is estimated to be at least $ 2.5 billion. They said Emirates NBD, which was planning to buy a majority stake in RBL Bank Ltd., was interested in the portfolio but later decided not to bid.

Kotak and Blackstone Inc., founded by billionaire Uday Kotak, sources said. He added that negotiations with the backed Federal Bank were ongoing and could still fail.

Deutsche Bank declined to comment. Kotak, Federal Bank Emirates NBD and RBL Bank did not respond to requests for comment.

According to sources, the German bank’s assets that could be seized include mortgage loans, small business loans and asset management. In 2018, Deutsche Bank reportedly canceled talks to sell its retail and private wealth business to InduInd Bank Ltd. after failing to obtain a price that would justify the sale of the profitable unit.

The bank, which currently has branches in 16 cities in India, has been narrowing its focus in recent years to focus on corporate and investment banking services for multinational and large domestic clients.

At the same time, Indian lenders are expanding their businesses to capture the boom in the country’s asset management market, driven by strong economic growth and rising deposits. The increase in stake purchases in India’s banking sector by the Japanese and other lenders also underlines the growing appetite for such assets.

The acquisition of Deutsche Bank’s assets will strengthen Kotak’s position as one of India’s leading banks in wealth and private banking. It is selectively expanding its retail businesses across an industry that is seeing some consolidation. Kotak acquired Standard Chartered Bank’s retail loan portfolio in India in 2024, while smaller peer Axis Bank Ltd. completed the acquisition of Citigroup Inc.’s India consumer business in 2023.

A successful deal for Federal Bank would accelerate its transformation from a regional lender to a national financial services player. The lender said last year that Blackstone would invest more than $700 million by purchasing warrants, making it the bank’s largest shareholder.