Kotak Mahindra Bank has completed the acquisition of a loan portfolio worth Rs 9,587.62 crore from its wholly-owned subsidiary, Kotak Mahindra Investments Ltd (KMIL), effective July 1, 2026. This direct assignment aligns with the bank's strategy to conduct the business activities of KMIL departmentally within the bank to comply with regulatory directions and drive operational synergies. The move is in compliance with the Reserve Bank of India (Commercial Banks - Undertaking of Financial Services) Directions, 2025, and aims to simplify the group structure.

The transaction follows the bank's decision communicated to the stock exchanges on March 24, 2026, to absorb the subsidiary's operations starting April 1, 2026. In a previous disclosure dated May 30, 2026, the bank had informed the exchanges about the proposed acquisition of the loan portfolio and non-treasury investments, which collectively amounted to Rs 10,639 crore as on March 31, 2026. The current assignment covers the loan component of that aggregate.

Transaction Details

The following table outlines the key financial details of the transaction:

The disclosure was made to the BSE Limited and National Stock Exchange of India Limited in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Kotak Mahindra Bank has executed a business transfer agreement to acquire the retail banking, private banking, and wealth management business of Deutsche Bank AG in India. The transaction, valued at approximately ₹281.7 crore, is structured as a slump sale and is expected to close by September 2027, subject to regulatory approvals. This acquisition aligns with Kotak's strategy to strengthen its affluent and SME banking franchise by integrating a customer base of around 150,000 and approximately 1,000 employees.

The business undertaking includes advances outstanding of approximately ₹29,000 crore and total deposits of approximately ₹16,000 crore as of March 31, 2026. Additionally, the acquisition brings assets under management of approximately ₹10,500 crore. The total purchase price is inclusive of non-compete consideration and will be paid entirely in cash. Kotak Bank will also pay the amount of assets less liabilities of the business undertaking at the closing time, subject to adjustments.

Financial and Operational Metrics

The following table outlines the key financial metrics of the acquired business as of March 31, 2026:

Regulatory Approvals and Conditions

The completion of the transaction is contingent upon several approvals. These include clearance from the Competition Commission of India (CCI) and approvals from National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for the transfer of the depository business. Other regulatory approvals may also be required. The transaction is not a related party transaction, and the promoter group of Kotak Bank holds no interest in the business being acquired.

Strategic Rationale

Management stated that the acquisition provides a strong strategic fit with Kotak's focus on affluent and SME segments. The bank expects the transaction to be Return on Equity (ROE) accretive upon closing. For Deutsche Bank, the move aligns with its Global Hausbank strategy to simplify its business and focus on areas with scale and strength. Approximately 16 of the 17 branches of Deutsche Bank in India will transfer to Kotak, with the Fort Mumbai branch retained by Deutsche Bank.

Separately, Kotak Mahindra Asset Management Company Limited and Kotak Alternate Asset Managers Limited, both wholly-owned subsidiaries of Kotak Bank, have entered into non-binding term sheets with Deutsche Investments India Private Limited. These term sheets pertain to the referral of clients for Portfolio Management Services and Investment Advisory, respectively, and are subject to the execution of definitive agreements.

Brokerage Views

The acquisition has drawn broad support from leading brokerages, all of whom maintain a positive stance on Kotak Bank. The following table summarises their ratings and target prices:

Jefferies maintained a Buy rating with a target price of ₹450, noting that the ₹2.8 billion acquisition adds 6% to loans, 3% to deposits, and 1% to AUM, with an 84 bps CET1 impact. The brokerage highlighted earnings accretion potential and cross-selling opportunities, while also noting the deal aligns with Deutsche Bank's strategic simplification goals.

Nomura reiterated its Buy rating with a target price of ₹460, characterising the deal as a disciplined near-book-value acquisition. The brokerage noted the quality of the secured loan book and a manageable capital impact, while cautioning that meaningful earnings gains would depend on successful integration and client retention.

HSBC also maintained a Buy rating with a target price of ₹460. The brokerage noted the acquisition adds 5.6% to loans, 2.8% to deposits, and 1.7% to CASA, while having no material impact on the bank's overall outlook.

CLSA maintained an Outperform rating with a target price of ₹440, referencing the acquisition of Deutsche Bank India's retail, private banking, and wealth business — comprising ₹290 billion in loans, ₹160 billion in deposits, and ₹105 billion in wealth AUM — at a ₹2.8 billion base purchase price. The brokerage noted management's expectation of ROE accretion, though no profitability details were disclosed.