According to sources familiar with the matter, Deutsche Bank AG's (DB.US) retail assets and wealth management business in India has received binding offers from Kotak Mahindra Bank Ltd. and Federal Bank Ltd. As foreign peers seek to exit the crowded banking market, local Indian banks are seizing the opportunity to bid for these assets.
Sources indicate that the two bidders are in advanced negotiations to acquire the relevant assets from Deutsche Bank, which are estimated to have a book value of at least $2.5 billion. Emirates NBD, which plans to acquire a majority stake in RBL Bank Ltd., had previously shown interest in the portfolio but later decided not to submit an offer.
The sources added that negotiations between Deutsche Bank and Kotak Mahindra Bank Ltd., founded by Indian billionaire Uday Kotak, and Federal Bank Ltd., backed by Blackstone, are still ongoing and could still fall apart. The assets Deutsche Bank has put up for sale reportedly include mortgage loans, small business loans, and wealth management operations.
It was reported that Deutsche Bank halted negotiations to sell its retail and private wealth business to IndusInd Bank Ltd. in 2018 after failing to secure a satisfactory sale price. Deutsche Bank currently operates branches in 16 cities across India.
The bank has been narrowing its strategic focus in recent years, concentrating on providing corporate and investment banking services to multinational corporations and large local clients. Meanwhile, driven by strong economic growth and rising deposits, local Indian banks are expanding their operations to capture opportunities in the country's booming wealth management market.
A series of equity acquisitions in the Indian banking sector by Japanese and other international banks also highlights the growing appetite for such assets. For Kotak Mahindra Bank Ltd., a successful acquisition of Deutsche Bank's assets would solidify its leading position in India's wealth and private banking industry.
The bank has been selectively expanding its retail business across the sector, having acquired Standard Chartered Bank's personal loan portfolio in India in 2024. For Federal Bank Ltd., a successful deal would accelerate its transformation from a regional bank into a nationwide financial services participant.
The bank stated last year that Blackstone Group would invest over $700 million by purchasing warrants, thereby becoming its largest shareholder.
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