Kotak Bank to acquire Standard Chartered India's ₹4,100-crore personal loan book

Kotak Mahindra Bank Limited (KMBL) has signed a deal to acquire the personal loan book of Standard Chartered Bank India. The move is aimed at strengthening its position in the retail credit market.

"As of September 30, 2024, the transaction comprises a total loan outstanding of around ₹4,100 crore (equivalent to ~$490 million)," the private lender says in a statement. The transaction is expected to be completed over the next 3 months, subject to regulatory and other approvals.

Kotak Mahindra Bank shares closed 0.32% up at ₹1,890.80 on the BSE today.

"The acquisition aligns with KMBL’s strategy to transform for scale 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," the statement adds.

With this deal, Kotak Bank says it aims to leverage its technology expertise and quality customer service to ensure a seamless transition for existing Standard Chartered Bank personal loan customers.

Ambuj Chandna, head-products, consumer Bank, Kotak Mahindra Bank, says 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."

He believes the transaction supports the bank's retail assets growth strategy and 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.”

Aditya Mandloi, head – wealth & retail banking, Standard Chartered Bank, India & South Asia says the 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.”

Kotak Mahindra Bank’s PAT for Q1 FY25 stood at ₹6,250 crore, up 81% YoY from ₹3,452 crore in Q1 FY24. The net interest income (NII) for Q1 FY25 increased to ₹6,842 crore, from ₹6,234 crore in Q1 FY24, up 10% YoY. The net interest margin (NIM) was 5.02% for Q1 FY25.