Kotak Mahindra Bank to buy Rs 4.1K cr India personal loan book of StanC

Leading private sector lender Kotak Mahindra Bank Limited (KMBL) has entered into an agreement to acquire the Rs 4,100 crore India personal loan portfolio of British banking major Standard Chartered Bank. The deal, for which the financial terms remain undisclosed, is subject to regulatory approval and is expected to close within three months, according to KMBL.

The loans KMBL is acquiring are classified as standard assets. This move, the bank said, aligns with its strategy to drive growth, expand market share, and tap into the affluent salaried customer segment.
 

This deal marks the second significant transaction between an Indian private sector bank and a foreign bank in recent years. 

                                                   

In 2022, Axis Bank, India’s third-largest private lender, acquired Citi India’s consumer and wealth management business.

“The transaction is expected to be completed over the next three months, subject to regulatory and other approvals and the satisfaction or waiver of customary closing conditions, and KMBL will acquire the loan book which will be outstanding closer to the completion date,” Kotak Mahindra Bank said in a press release.
 

While Kotak Mahindra Bank in the past has acquired many entities like ING Vysya Bank, this is the first major deal under the leadership of Ashok Vaswani, who took over as managing director and chief executive officer in early 2024.
 

The bank said that the acquisition aligns with its larger strategy to scale up operations and focus on customer-centric growth. “The high-quality loan book from Standard Chartered Bank allows KMBL to build on its strength in the affluent customer segment and further reinforces its leadership in the retail lending space,” it said.

 

As of June 30, consumer loans accounted for 45 per cent of KMBL’s total loan book, which stood at Rs 1.83 trillion. Of that, personal loans, unsecured business loans (for non-personal use), and consumer durables loans represented Rs 20,317 crore, reflecting 1 per cent year-on-year growth.
 

“KMBL aims to leverage its technology expertise and quality customer service to ensure a seamless transition for existing Standard Chartered Bank Personal Loan customers, maintaining the high standards both institutions are known for,” the Indian lender said.
 

Meanwhile, Standard Chartered Bank explained that the decision to divest its personal loan portfolio aligns with its focus on the wealth management, affluent, and SME segments in India. Aditya Mandloi, head–wealth & retail banking, Standard Chartered Bank, India & South Asia, said: “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. Together with Kotak (Mahindra Bank), we remain committed towards ensuring a seamless transition for our clients.”
 

Ambuj Chandna, head-products, consumer bank, Kotak Mahindra Bank, said with Kotak Group’s successful integration track record, the lender is committed to a smooth transition. “India’s unsecured lending market offers significant growth potential for Kotak, especially in the higher-end segment. Our strong risk management, customer-centric products, and technology-driven approach position us for sustainable growth,” added Chandna.

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd