Kotak Bank to buy Deutsche Bank’s India retail business for ₹282 crore
Mumbai: Kotak Mahindra Bank has signed a definitive agreement to acquire Deutsche Bank’s retail banking, affluent private banking and wealth management business in India for a period of time.approximately ₹282 croreThe private sector bank said in a press release on Tuesday.
Purchase will add approx. ₹29,000 crore loan, ₹16,000 crore deposits and ₹Kotak Bank has ₹10,500 crore in assets under management on its balance sheet.
The deal will bring the German bank’s approximately 150,000 customers and approximately 1,000 employees into Kotak and strengthen the lender’s presence in the affluent and small and medium enterprise (SME) segments. The transaction is expected to be completed by September 2027, subject to regulatory approvals, including clearance from the Competition Commission of India.
Ashok Vaswani, managing director and chief executive officer of Kotak Mahindra Bank, said, “This transaction aligns well with our focus on the affluent and SME segments. It makes strong strategic fit and solid business sense. It also brings a high-quality customer franchise and experienced teams and adds opportunities for increased scale and proximity.”
“We look forward to warmly welcoming these customers and colleagues to the Kotak family, and our priority will be to ensure disciplined integration and continuity while developing greater depth and capability in this business,” Vaswani added.
The Indian private lender’s client assets rose 14% year-on-year in the quarter ended March. ₹5.45 trillion and deposits increased by 15% annually ₹5.72 trillion.
Retail banking, which constitutes 37% of the total loan book share in total assets, increased by 14% on an annual basis. ₹1.91 trillion, followed by the SME book ₹Corporate banking increased by 19% to 1.22 trillion ₹1.13 trillion and commercial banking ₹79,270 crore, up 22% and 8% respectively.
For Deutsche Bank, the sale marks another step in its strategy to simplify operations and sharpen focus on businesses where it has larger scale.
“This transaction marks an important step in sharpening Deutsche Bank’s portfolio and focusing on areas where we have scale, strength and the ability to deliver sustainable returns,” said Kaushik Shaparia, CEO of Deutsche Bank Group India and Emerging Asia.
He said India remains a core market for the German lender backed by its corporate and investment banking franchise, while Kotak offers a strong domestic platform to provide long-term continuity to its onshore private banking and wealth clients and create meaningful growth opportunities for its employees.
Kotak said the acquisition is in line with its inorganic growth strategy to pursue targeted opportunities that strengthen its core franchise. The bank expects the acquired business to complement its relationship-focused model and expand its banking and investment offerings for affluent customers.
Both lenders said they will work together to ensure a smooth transition for customers and employees. Upon completion, the transaction is expected to be return on equity accretive for Kotak and common equity tier-1 (CET1) accretive for Deutsche Bank. CET1 consists of common shares and retained earnings.
Deutsche Bank will continue to operate its corporate bank, investment bank and other businesses in India following the sale.
Kotak Bank’s return on equity stood at 12.27% as of March-end, compared to 10.68% quarterly, and its CET-1 ratio stood at 21.3% as of March-end.
The acquisition of Kotak marks the latest consolidation in India’s private banking sector after Axis Bank strengthened its affluent banking, wealth management and retail franchise by acquiring Citibank India’s consumer businesses in 2023.
