Commercial banks, including Axis Bank IndusInd Bank and Standard Chartered Bank are in the race to acquire Deutsche Bank India’s credit card business. The bank has narrowed in on these banks from the initial 11 bidders. ? Banks interested in buying the book would have to submit their final bids by February 12. Banks including Axis Bank, IndusInd Bank and Standard Chartered Bank are in the process of submitting their final bids,” said a source. Deutsche Bank has 1.5 lakh active cards and the outstandings of Rs 200-250 crore.
?The quality of the portfolio has thrown up no surprises as all credit card players did go through a rough patch in 2009-10. The non performing loans are in single digits. The platinum customer base is of interest to us. The pricing will be key to the sale.” said a senior official from a bank who has bid for the portfolio.
?Some players, including Dhanalaxmi Bank, Karnataka Bank have pulled out of the race after due diligence of the portfolio,” said a senior banker.
In the first stage the German bank had called for non binding bids from interested parties and it had received closed to 11 bids. Now the bank has shortlisted on few banks who will be given additional information on the card portfolio.
?The talks for sale has been going on for a year. Its a long drawn process however one expects that the sale could be concluded by March 2011,” said a source.
The credit card portfolios of most commercial banks were hit by the slowdown which started in September 2008. Non-performing loans rose to around 20% in 2009-10. Banks were compelled to scale back business, reintroduce fees and focus on top-end customers.
Like peers, Axis Bank has been keen on growing credit card portfolio. Most recently, there has been a reshuffle in the consumer banking portfolios at the private sector bank and Jairam Sridharan, an ex ICICI Banker and someone who also worked with US-based lender Capital One senior VP, retail assets, is handling the cards portfolio. Samir Nimavarkar, an old time retail banker, who handled the bank?s card business has quit after he was moved to the treasury department.
