IndusInd Bank buys Deutsche credit card unit
Mumbai, April 11: Private lender IndusInd Bank today acquired the credit card business of Deutsche Bank.
IndusInd Bank will get access to around 2 lakh credit card customers and the entire operating platform of the cards franchise, including talent and technology.
The financial details of the deal were not given today; sources put it at around Rs 300 crore.
For IndusInd Bank, the foray into the credit card business is expected to enhance the bouquet of product offerings to its customers.
The private entity is looking to expand its range of financial products, thereby becoming a full-service bank.
Deutsche Bank had launched its full suite of credit cards in July 2006 as part of a plan to enhance its portfolio of offerings, less than a year after it ventured into retail banking.
On why it was transferring the credit card business to IndusInd Bank, Prashant Joshi, Deutsche Bank’s head of private and business clients, India, said, “Our agreement with IndusInd Bank is in line with our desire to build our retail banking business in India around our core strengths of deposits, wealth management and secured lending.”
He added that the foreign bank was committed to rolling out a “branch buildout strategy” in India.
The bank has 15 branches in India and this is expected to go up this year.
For IndusInd Bank, the acquisition is expected to accelerate the launch of credit cards which the bank considers a critical link in its suite of consumer banking products.
Sumant Kathpalia, head of consumer banking at IndusInd Bank, said the strategic intent behind the move was to offer targeted credit card products to chosen clients.
“Cards are an important element in our segmented offering. Deutsche Bank has a stable cards portfolio and the acquisition gives us a headstart in building the cards business,” Kathpalia said
The credit card portfolio of banks took a hit after the global credit crisis in 2008. This led to banks deliberately pruning the size of this business by re-introducing annual fees and focussing only on customers at the top end. However, the recovery in India has in the past few months seen many banks turning aggressive on their credit cards business.