Kotak Bank stock surges 1% after Group acquires vehicle financing portfolio of Volkswagen Finance

Under the deal, Kotak Mahindra Prime will acquire the passenger cars and two-wheelers portfolio, and Kotak Mahindra Bank will acquire the commercial vehicles portfolio of VWFPL.

Sep 17, 2021 09:09 IST India Infoline News Service

Kotak Mahindra Bank announced that the Group has acquired the vehicle financing loan portfolio of Volkswagen Finance Private Limited (VWFPL), the Indian captive financing arm of Volkswagen Group. Under the deal, Kotak Mahindra Prime will acquire the passenger cars and two-wheelers portfolio, and Kotak Mahindra Bank will acquire the commercial vehicles portfolio of VWFPL.

D Kannan, Group President – Commercial Banking, Kotak Mahindra Bank and Director of Kotak Mahindra Prime said, "The strategic intent behind this acquisition is to further strengthen Kotak’s vehicle financing loan portfolio and expand our market share. VWFPL has been operating in the country since 2009 and during this time has built a strong customer portfolio. The long-term growth prospects of the Indian vehicle market are very attractive and this acquisition reinforces Kotak’s standing as one of the leading vehicle financing players.”

“I would also like to take this opportunity to welcome Volkswagen customers to the Kotak Group and assure them that they will experience a seamless transition and enhanced customer experience with access to a wide suite of product offerings, backed by exceptional service standards,” added Kannan.

Aashish Deshpande, MD and CEO of Volkswagen Finance Pvt. Ltd. said, “The sale of our retail portfolio aligns to our new strategic focus towards a refined digital strategy through our subsidiary, the digital platform KUWY. It 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.”

This acquisition will enable Kotak to gain access to over 30,000 high-quality customers with a total loan outstanding with VWFPL of around Rs1,340cr. All these acquired loans are classified as “Standard Loans” as per the current Reserve Bank of India (RBI) guidelines. In addition to the “Standard Loans”, Kotak has also acquired the Non-Performing Assets portfolio of VWFPL.

At around 09.18 am, Kotak Bank was trading at Rs1925.00  per piece up 1% on Sensex.

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