Mumbai: Kotak Mahindra Bank today acquired Barclays India's business loans portfolio or SME lending business worth about Rs 700 crore for an undisclosed amount.
"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. It is also part of the company's broader strategy of adopting inorganic growth routes," Kotak Mahindra Bank Group strategy head Paul Parambi told PTI.
However, he did not disclose the deal size citing confidentiality with the British lender, which also refused to comment.
The sold-out business was being managed by Barclays India Investment and Loan Ltd and had a book size of about Rs 700 crore involving 6,000 customers, Kotak Bank said, adding all these acquired loans are classified as standard loans as per existing regulatory norms.
The parties had won the go-ahead for the deal from the Competition Commission last week.
When asked whether Kotak Bank paid a premium or discount to Barclays, he just said "the valuation made sense for us and we are happy with the deal size."
"The strategic intent behind this acquisition is to further grow our business loans portfolio for chosen client segments. Business loans are an important element in our segmented offering," he said.
Barclays, which has been trimming its exposure here, had last year sold its loss-making credit card business to IndusInd Bank. Barclays has also been shedding/ merging it sales people as part of the global strategy to cut cost.
Kotak loan book is about Rs 50,000 crore and its business banking portfolio is worth about Rs 5,000 crore or 10 per cent of the advances book, Parambi said.
First Published: Tuesday, February 05, 2013, 20:14