IndusInd Bank on Monday announced its foray into the credit card business by acquiring Deutsche Bank's credit card business in India. The acquisition gives the private sector bank close to 2,00,000 card customers, technology platform and about 200 personnel.
Credit cards business was the one missing link in IndusInd Bank's product suite for the consumer segment and this acquisition will help the bank kick-start the business much faster, said Mr Romesh Sobti, MD and CEO.
“Deutsche Bank has been in this segment for the past five or six years so we have got a matured and risk-validated portfolio. As it is fully provided for, we start with a zero default. If we had gone about setting up credit card business organically it would have taken us time,” Mr Sobti said. He, however, refused to disclose how much the bank had paid for the acquisition. In September 2010, IndusInd Bank had hired Mr Anil Ramachandran to set up the credit card business. Mr Ramachandran was earlier the head of Deutsche Bank's credit card business.
According to Mr Sobti, the credit card business is seeing a revival after three years. With data from credit bureaus and risk compliance measures in place, the business will see good growth over the next four to five years. “Profitability has come back to the cards business,” he said.
IndusInd Bank hopes to issue new cards under its brand-name by June. It will also offer new propositions and segmentation to suit the needs of its customers. A press release, issued by Deutsche Bank, quoted Mr Prashant Joshi, Head, Private and Business Clients, India as saying, “Our agreement with IndusInd Bank is in line with our desire to build our retail banking business in India around our core strengths of deposits, wealth management, and secured lending.”