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Kotak buys Barclays loan book

Mumbai, Feb. 5: Private sector Kotak Mahindra Bank Ltd has acquired Barclays India’s business loan portfolio for an undisclosed amount.

Following the acquisition, Kotak Mahindra Bank will gain access to around 6,000 business loan customers with a total outstanding loan of about Rs 700 crore. The bank said the acquired loans were classified as standard loans according to Reserve Bank guidelines.

“The acquisition is in line with Kotak Bank’s strategy to add value to its existing business lines as it strengthens its business loans portfolio,” the bank said.

Paul Parambi, head (group strategy), at Kotak Mahindra Bank, said the move was aimed at expanding the business loan portfolio in select client segments.

“Business loans are an important element in our segmented offering. This acquisition also gives us a very good set of customers who can be offered our entire suite of banking products. We have an appetite for further acquisitions, which can strategically create value for us and will actively seek such opportunities,” he added.

Private banks have been acquiring selective assets from foreign lenders over the past few years even as they grow organically by setting up branches

Kotak Bank has been following a strategy of growing both its asset and liability book.

It is one of the few lenders to raise interest rate on savings accounts following its deregulation by the RBI in October 2011.

This has helped the bank to ramp up its depositor base. It added 2.1 lakh customers in the third quarter of this fiscal, while cash balances in savings accounts rose nearly 50 per cent over the same period last year.

In consumer banking, the bank has been focusing on increased cross-selling of products that include auto loans, personal loans and mortgage products in select territories.

In wholesale banking, it is looking to offer working capital assistance apart from vendor financing.

In the third quarter, Kotak Bank’s standalone net profit rose more than 31 per cent to Rs 362 crore led by a robust loan growth.

Net interest income increased 26 per cent to around Rs 820 crore.

The bank’s presence in life insurance, asset management, banking and capital markets has helped it to cross-sell products.

 
 
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