StanChart sells India personal loan business to Kotak Mahindra Bank
Adds details on deal, executive comments and industry background from paragraph 2 onwards
Oct 18 (Reuters) -Kotak Mahindra Bank KTKM.NS will buy Standard Chartered Bank's personal loan business in India, the Indian lender said on Friday, leaving the U.K.-based company to focus on its wealth and investment banking business in Asia's third-largest economy.
StanChart's personal loan book had an outstanding of 41 billion rupees ($488 million) as of Sept. 30, Kotak Mahindra Bank said.
India's personal loan market has become intensely competitive amid strong consumer demand. Last November, the central bank asked lenders to set aside more capital for such loans on concerns that soaring demand could lead to higher risk.
This has led to a moderation in banks' outstanding personal loans, to about 17% on-year in August from 18.3% a year ago.
"India's unsecured lending market offers significant growth potential for Kotak, especially in the higher-end segment," said Ambuj Chandna, head-products, consumer bank at Kotak Mahindra Bank.
The proposed transaction consists of so-called standard loans, or those loans that are performing well and are not showing any signs of distress or default, as per the Reserve Bank of India (RBI) guidelines.
"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 (small and medium enterprises) segment," said Aditya Mandloi, Standard Chartered Bank's head of wealth and retail banking for India and South Asia.
Mandloi added that India continues to be a key market for StanChart's network and the lender will continue to invest and grow in the country.
The transaction is expected to be completed over the next three months, subject to regulatory and other approvals as well as other closing conditions, Kotak said.
($1 = 84.0290 Indian rupees)
Reporting by Dimpal Gulwani and Siddhi Nayak; Editing by Savio D'Souza
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
