Kotak Mahindra Bank Limited (BSE:500247) and The Federal Bank Limited (NSEI:FEDERALBNK) are in the race to purchase the retail and wealth management businesses of Deutsche Bank in India, multiple people familiar with the matter told ET. This is the second attempt in eight years by the German lender to sell this revenue stream in the country. Both private banks have evaluated the portfolio and negotiations are ongoing on the pricing of the deal, said the people cited above.
The bundle includes personal loans and some mortgages the bank wants to sell. The lender's wealth management business in India is estimated to have assets under management of around INR 250,000 million. The sale is part of Deutsche Bank's broader plans to completely exit the retail business in India as part of a global restructuring initiated by CEO Christian Sewing to make the lender more profitable.
"The negotiations are ongoing but we need to look at valuations. Both Kotak and Federal Bank are open to expanding their book by buying portfolios and this is one such opportunity," said a person familiar with the negotiations. "This also gives them a bite of Deutsche Bank's wealth management, which complements these two banks' own ambitions in this space and also their retail businesses." Spokespersons at Kotak Mahindra Bank and Federal Bank did not respond to ET's mailed queries on the subject.
A Deutsche Bank spokesperson declined to comment. The bank had earlier planned to sell its retail and wealth management business in India in 2017 but withdrew the plans. ET could not ascertain the exact timeline of the sale, although the people cited above said it is going to be a long drawn out process due to the approvals needed from both the regional and global headquarters of the German lender.
