India’s Kotak Bank gains on loan book acquisition
10:40, 23 December 2021
Stock in India’s Kotak Mahindra Bank climbed on Thursday following news the lender has acquired Ford Motor Company-owned Ford Credit India’s passenger vehicle finance portfolio.
The stock rose some 1.5% to INR1788.70 in afternoon trade on the National Stock Exchange (NSE) after the bank said its car finance subsidiary, Kotak Mahindra Prime, had bought the loan portfolio.
The acquisition gives Kotak Mahindra Prime access to more than “16,000 high-quality customers with a total loan outstanding of INR4.25bn ($56.5m)”, according to a 22 December stockmarket statement.
Ford Credit India’s (FCIPL) customers will transition to Kotak Mahindra Prime over the next few months, it added.
Vehicle financing growth
“The acquisition of Ford Credit’s loan portfolio further reiterates our continued commitment to grow our vehicle financing business and have a strong presence in this space,” said Kotak Mahindra Prime’s managing director Vyomesh Kapasi.
“We would like to welcome Ford customers to Kotak Group and look forward to supporting their future financing needs with Kotak’s wide suite of product offerings.”
In September, the Kotak Mahindra Group announced it had bought the vehicle financing loan portfolio of Volkswagen Finance, comprising passenger cars, two-wheelers and commercial vehicles.
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Wide range of loans
Kotak Mahindra Prime offers loans for passenger cars, multi-utility vehicles, pre-owned cars and two-wheelers, in addition to providing inventory funding and term loans to car and two-wheeler dealers. It is also in the business of retail personal loans, developer funding and corporate loans.
The firm is the preferred lender for various manufacturers in the country and operates a retail distribution network of 121 branches in 21 states and union territories.
The Kotak Mahindra Bank has a market capitalisation of roughly INR3.54trn on the NSE, where its shares have dropped some 10% so far this year. The founders held 26% of the private sector lender’s stock as of the quarter through September.
FCIPL has been operating in the sub-continent since 2015.
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