Kotak Mahindra Bank on Thursday announced the acquisition of German carmaker Volkswagen's captive vehicle finance business for an undisclosed sum.
The deal involves the private sector lender's in-house NBFC Kotak Mahindra Prime acquiring the passenger car and two-wheeler portfolio, while Kotak Mahindra Bank Limited (KMBL) will acquire the commercial vehicles portfolio from Volkswagen Finance (VF), as per an official statement.
Kotak will gain access to over 30,000 high-quality customers with a total loan outstanding with VWFPL of around Rs 1,340 crore, the statement said, adding all these loans have been classified as "standard loans".
Apart from this, the deal also involves the acquisition of VF's non-performing assets, it said, without spelling out the size of the book.
"The strategic intent behind this acquisition is to further strengthen Kotak's vehicle financing loan portfolio and expand our market share," D Kannan, the bank's group president for commercial banking, said.
He said VF, which had been in India since 2009, has built a strong portfolio, and added that the long term prospects of the Indian vehicle market are very attractive.
Kannan assured a seamless transition for VF customers to Kotak Group, and added that they will also get access to a wider suite of products and services.
"The sale of our retail portfolio aligns to our new strategic focus towards a refined digital strategy through our subsidiary, the digital platform KUWY," VF's managing director and chief executive Aashish Deshpande said.
This is a step towards the evolution of the customer journey in the digital space by offering a simplified and agile solution to both our customers and dealerships, while aligning effectively to support the VW India 2.0 strategy, he added.
The Kotak Mahindra Bank scrip closed 1.87 per cent higher at Rs 1,905.75 a piece on the BSE on Thursday, as against gains of 0.71 per cent on the benchmark.