Kotak & Federal Bank Eye Deutsche Bank’s Indian Retail Business: What’s Next?

Deutsche Bank is no longer willing to work in retail banking in India. The company is selling its personal loans, some home loans, and its wealth management business. Kotak and Federal Bank are highly interested in acquiring the business. However, the price negotiations are still underway. Notably, this huge sale is also part of Deutsche Bank’s global plan. According to Deutsche Bank, it wants to focus more on its profitable areas. Interestingly, Indian businesses are making good money (INR 3,070 crore in FY 2024–25, it's up 55% from INR 1,977 crore) but still want to sell. Why? For all that, learn more. 

What Exactly Is Being Sold By Deutsche Bank?

Its Retail business

Total retail assets are ₹25,038 crore.

Its Portfolio includes:

• Personal loans (big chunk).
• Some mortgages (especially home loans).

Wealth management business

• The company manages INR 25,000 crore for its wealthy clients.
• The deal also includes investment products connected to the bank’s corporate business.

Retail segment revenue

• Its FY 2024–25 revenue is INR 2,455 crore (4% higher than the previous year). 

Why Does Deutsche Bank Want to Exit?

The bank has a new global restructuring strategy in hand, run by CEO Christian Sewing and wants to:

• Become more profitable.
• Reduce costs.
• Focus on business areas that perform better worldwide.

Notably, India is the only country where they operate (retail banking business) outside Europe. The company wants to fix it by leaving the segment altogether.

There are around 17 branches in India, and after its exit, many may close.

Why Are Kotak and Federal Bank Interested?

Two major banks in India are currently in talks with the company to buy Deutsche Bank’s India retail business.

Kotak and Federal Bank are looking to expand their retail lending and wealth management businesses in the country.

And buying Deutsche Bank would be good because:

• More customers
• More deposits and loans
• Access to wealthy clients
• A ready-made business

Deutsche Bank India Financials

For the record, Deutsche Bank India is doing really well, in fact, profitable:

• FY 2024–25 profit is INR 3,070 crore (up 55% from ₹1,977 crore).
• Total income: INR 12,415 crore, up by 11%.
• Controlled operating expenses.
• It has shown strong performance in investment banking, corporate banking, and wealth management. 

Parent company has repeatedly put in money to support India operations:

• INR 3,946 crore between 2018 and 2021.
• INR 5,113 crore in 2024.

However, the company wants to exit the retail segment. 

How Long Will the Sale Take?

The process is slow right now because:

• The deal needs approval from Deutsche Bank’s India team.
• The approval shall come from Deutsche’s global headquarters.
• Detailed checks by the buying bank.
• Lastly, regulatory approvals in India.