1 min read.Updated: 16 Sep 2021, 05:58 PM ISTLivemint
Kotak will gain access to over 30,000 high-quality customers with a total loan outstanding with VWFPL of around Rs1,340 crore. All these acquired loans are classified as standard loans as per current RBI guidelines
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MUMBAI: Kotak Mahindra Group on Thursday said it has acquired the vehicle financing loan portfolio of Volkswagen Finance Pvt Ltd (VWFPL), the Indian captive financing arm of the Volkswagen Group.
Under the agreement, Kotak Mahindra Prime Ltd will acquire the passenger cars and two-wheelers portfolio, and Kotak Mahindra Bank Ltd will acquire the commercial vehicles portfolio of VWFPL. Kotak Mahindra Prime is a subsidiary of Kotak Mahindra Bank and is in the business of financing passenger vehicles and two-wheelers.
With this acquisition, Kotak said it will gain access to over 30,000 high-quality customers with a total loan outstanding with VWFPL of around Rs1,340 crore. 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.
“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," said D Kannan, group president (commercial banking) at Kotak Mahindra Bank and a director of Kotak Mahindra Prime.
Aashish Deshpande, managing director and chief executive of Volkswagen Finance said the sale of its retail portfolio aligns with its new strategic focus on a refined digital strategy through its subsidiary, the digital platform KUWY.