Kotak Mahindra Bank acquires Standard Chartered Bank’s personal loan portfolio worth ₹4,100 crore

In a significant move to enhance its retail lending segment, Kotak Mahindra Bank has agreed to acquire Standard Chartered Bank's personal loan book in India, valued at ₹4,100 crore. The acquisition is set to be finalized on October 18, 2024, as per Kotak Mahindra Bank’s announcement in an exchange filing on Friday. The loan book's total outstanding amount was approximately ₹4,100 crore as of September 30, 2024.

“We are pleased to inform you that Kotak Mahindra Bank Limited has entered into a definitive agreement with Standard Chartered Bank, India for the acquisition of its Personal Loan book,” the bank stated.

This acquisition includes loans classified as “Standard Loans” per the Reserve Bank of India (RBI) guidelines. Kotak Mahindra Bank will purchase the personal loan portfolio, which will remain outstanding until the transaction's completion. Importantly, Kotak clarified that this deal is not a related party transaction, meaning neither the promoter nor the promoter group has any interest in it.

The completion of this acquisition is expected to take over three months, pending regulatory and other requisite approvals and the satisfaction or waiver of customary closing conditions.

Enhancing Retail Lending and Affluent Customer Base

Kotak Mahindra Bank aims to strengthen its affluent customer segment and retail lending capabilities through this acquisition. Ambuj Chandna, Head-Products, Consumer Bank at Kotak Mahindra Bank, highlighted the strategic benefits of this acquisition, stating, “This transaction supports our Retail Assets growth strategy and reinforces our commitment to retail lending. It provides access to a high-quality customer base, and with Kotak Group’s successful integration track record, we are committed to a smooth transition.”

On the other hand, Standard Chartered Bank's decision to divest its personal loan book aligns with its strategic focus on accelerating growth in the wealth, affluent, and SME segments. “Our decision to divest the personal loan book is in line with the Bank’s focus to accelerate growth in the wealth, affluent, and SME segment. India continues to be a key market for Standard Chartered network, with Wealth & Retail Banking (WRB) and Corporate & Investment Banking (CIB) as the cornerstones, and we will continue to invest and grow in India," said Aditya Mandloi, Head – Wealth & Retail Banking, Standard Chartered Bank, India & South Asia.

This transaction signifies a strategic shift for both banks, with Kotak Mahindra Bank enhancing its retail lending portfolio and Standard Chartered focusing more on wealth and SME growth.