Kotak planning to acquire CitiFinancial
By Neelima Shankar
May 13, 2010
Print    Email    RSS   

Private sector lender, Kotak Mahindra Bank Ltd has plans to acquire the consumer finance arm CitiFinancial Consumer Finance India Ltd (CitiFinancial) of CitiBank's Indian division. The two parties are in talks over the issue.

The consumer finance wing of the bank is into personal and retail lending to the lower income group.

According to an investment banker, Kotak is undertaking due diligence of CitiFinancial's assets. Due diligence refers to the proper valuation of the target company's assets done by the predator company before going for a purchase. Due diligence is done for all forms of corporate restructuring like merger, acquisition, takeover etc.

According to an executive from Kotak, the talks between the two parties are "currently at a very, very preliminary stage" and "general" in nature.

CitiFinancial has been hit with losses since 2007. Unsecured personal loans have been the major accruing factor of these losses. Accroding to a former employee of the bank, "irrational lending, loose underwriting norms and ample liquidity" have been prime causatives.

Kotak Mahindra Bank has a total asset base of Rs37,439 crore, has 249 branches across 145 locations and 492 ATMs.

According to Sailav Kaji, director (institutional equities) at Fiduciary-Euromax Capital Markets Ltd, "Kotak is looking to expand. In the past couple of years, when others like Yes Bank Ltd were expanding aggressively, Kotak remained subdued. Citi has pumped in capital in the non-banking arm to absorb the losses."



(Comments Posted : 0) Post Your Comments
Show All Comments
 Select a product:

 Select a product:

Recurring Deposits or Systematic...
12 point conduct checklist for bank and...
Fixed Deposits: Safest instrument to invest
Children’s Saving Account- teaching...
Should you preclose your current FD for...

NANGAL: CaℒL Giℛℒ In Una 09855660911 Escoℛt...
Chandigarh@CaℒL Giℛℒ In Rajpura +O9855660911...
If I invest 100000 rupees deposit for 2 year , how...

Federal Bank launched V connect for its customers Feb 12, 2015
Andhra Bank on expansion mode Feb 11, 2015
Dena Bank earned a profit of 13%. Feb 9, 2015
Banks expected to cut down the rates Feb 5, 2015
RBI kept the rates unchanged Feb 4, 2015
News Archive