Deutsche Bank AG’s India retail assets and wealth management have drawn binding bids from Kotak Mahindra Bank Ltd. and Federal Bank Ltd., according to people familiar with the matter, as the local lenders pounce on opportunities from foreign players seeking to exit the crowded banking market.
The suitors are in advanced discussions with Deutsche Bank for the assets, which are estimated to have a book size of at least $2.5 billion, the people said, asking not to be identified because the talks are private. Emirates NBD, which plans to buy a majority stake in RBL Bank Ltd., had shown interest in the portfolio but later decided not to submit a bid, they said.
Negotiations with Kotak Mahindra Bank, founded by billionaire Uday Kotak, and Blackstone Inc.-backed Federal Bank are ongoing and could still fall through, the people said.
Deutsche Bank declined to comment. Kotak Mahindra Bank, Federal Bank, Emirates NBD and RBL Bank didn’t respond to requests for comments.
Deutsche Bank in India
The German lender’s assets up for grabs include mortgage loans, small business loans and wealth management, the people said. In 2018, it reportedly called off talks to sell its retail and private wealth business to IndusInd Bank Ltd. as it didn’t get a price that justified selling the profitable unit.
The bank, which currently operates branches in 16 cities in India, is narrowing its focus in recent years to focus on corporate banking and investment banking services for multinational and large domestic clients.
At the same time, Indian lenders are expanding their businesses to capture the boom in the country’s wealth management market, fueled by robust economic growth and rising deposits. A flurry of stake purchases in India’s banking sector by Japanese and other lenders is also highlighting the growing appetite for such assets.
Why Kotak, Federal Bank want Deutsche Bank India
Acquiring Deutsche Bank’s assets would strengthen Kotak Mahindra Bank’s position as one of India’s leading banks in wealth and private banking. It has been selectively expanding its retail businesses across the banking industry, which has seen some consolidation. Kotak Mahindra Bank acquired Standard Chartered Bank’s personal loan portfolio in India in 2024, while smaller peer Axis Bank Ltd. completed the acquisition of Citigroup Inc.’s India consumer business in 2023.
For Federal Bank, a successful deal would accelerate its transformation from a regional lender to a national financial services player. The lender said last year that Blackstone will invest more than $700 million by buying warrants, making it the bank’s largest shareholder.