Private lender IndusInd Bank will acquire the credit card business of Deutsche Bank in India. The German bank today announced that it has entered into an agreement to transfer its local credit card business to IndusInd Bank.
The deal, involving over 15,000 credit cards and a total loan portfolio of about Rs200 crore, will mark IndusInd Bank's entry into the credit card business. The deal is expected to be completed in the next couple of weeks, reports quoting IndusInd sources said.
IndusInd Bank, which had already announced plans to enter the credit card business, last year, roped in Anil Ramachandran from Deutsche Bank to set up the credit card business.
The acquisition will also make IndusInd Bank a full service bank and the private lender said it is planning to expand into a full range of customer-centric products.
Deutsche Bank said it would focus on its core areas of secured lending and wealth management in India. The agreement with IndusInd Bank is in line with this, Prashant Joshi, head, private and business clients, India, said.
“Deutsche Bank has a rapidly expanding retail franchise in India with a high quality customer base. We are committed to executing our successful branch build out strategy in India where we have 15 branches currently and will increase this further again this year,” Joshi said.
He said the bank has built a quality premium credit card business in India and it has excellent potential if it achieves a certain scale, which IndusInd could with its wide network.
“IndusInd Bank's widespread footprint across India makes them an ideal choice to take the business forward. We are committed to working with Induslnd Bank to ensure a smooth transition for clients and other stakeholders,” said Shameek Bhargava, head of Credit Cards Asia Pacific.
Meanwhile, reports said other lenders such as Axis Bank, ICICI Bank and Standard Chartered Bank who were interested in buying Deutsche Bank's card business, have opted out of the race as the valuation was too high.
IndusIndd Banks entry into the credit card business comes at a time when the number of credit cards in India is steadily declining. The number of outstanding credit cards in India declined by more than 10 per cent to 18.1 million as of end-January 2011, Reserve Bank data showed.
Source: Domain B