Kotak Mahindra Bank expects major global cooperation boost from ING Vysya deal

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Mumbai | Published: November 24, 2014 8:26:07 PM

Having sealed a deal to merge ING Vysya Bank with Kotak Mahindra Bank, eminent banker Uday Kotak...

Having sealed a deal to merge ING Vysya Bank with Kotak Mahindra Bank, eminent banker Uday Kotak has said that the merger presents a significant opportunity for international cooperation with Dutch giant ING Group.

The all-share deal, valued at about Rs 15,000 crore, would create India’s fourth largest bank with a combined balance-sheet size of over Rs 2 lakh crore and market value of over Rs 1 lakh crore.

Besides, the deal is also likely to provide a significant opportunity for foreign investors to take an exposure to the Indian banking industry through the merged entity, which would have only 46.9 per cent foreign ownership as against a permitted level of up to 74 per cent, Kotak Mahindra Bank’s chief Uday Kotak said.

Post the merger, Dutch financial services giant ING, currently the main promoter of over 80-year-old ING Vysya Bank, would become a shareholder in the merged entity with 6.5 per cent stake and would remain invested for minimum one year.

Kotak, who heads nearly 12-year-old Kotak Mahindra Bank, expressed confidence that the deal would provide significant opportunities for international cooperation, in addition to huge synergies in domestic markets and in various product segments and on digital platform.

“I see a very significant opportunity for international cooperation. Post this merger, ING Group will be a 6.5 per cent shareholder of the merged entity and I see a significant opportunity for cooperation between the two parties including for all their international clients wanting banking facility in India and our Indian clients wanting ability to do global financing and business.

“So, the whole synergy out of this merger we think we can produce from ING, that can be significant. ING will remain invested for a minimum period of one year post this merger,” he added.

Kotak replied in affirmative when asked whether such an international cooperation can continue even if ING decides to exit after expiry of mandatory one-year period.

“We have anyway known ING for a long time and we are very confident that we can build on this relationship,” he added.

“The other big area on the international side is that ING is one of the most advanced bank on the digital play and we are quite excited about the digital play as well. That’s another area of synergy that we are looking forward to.

“So, when we look at all these, we actually feel that this is a marriage almost made to order for both parties,” he added.

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