Deutsche Postbank AG, the German lender being acquired by Deutsche Bank AG, agreed to sell its Indian mortgage-lending unit to a group led by Dewan Housing Finance Ltd. for as much as 10.8 billion rupees ($238 million).
The Bonn-based lender will sell its Deutsche Postbank Home Finance Ltd. division for 10.5 billion rupees to 10.8 billion rupees, Postbank said in a statement distributed by the DGAP newswire today. The deal is expected to boost net income by a “mid-double-digit million-euro” amount, the German bank said.
The purchase will increase Dewan’s outstanding loans by more than 40 percent, helping narrow the gap with larger rivals including Housing Development Finance Corp. Postbank is selling the unit to focus on German retail lending, its main business.
The disposal is scheduled to close in the first quarter of 2011, subject to approval by the National Housing Bank, India’s supervisory authority, Postbank said today.
New Delhi-based Deutsche Postbank Home Finance had outstanding loans of 48 billion rupees as of Sept. 30, and profit of 390 million rupees for the previous six months, Crisil Ltd., the Indian arm of Standard & Poor’s, said Oct. 21. The unit has a market share of 1.5 percent to 2 percent, it said.
Dewan Housing posted a profit of 1.09 billion rupees for the six months ended Sept. 30, while its outstanding loan book was at 111.45 billion rupees, according to an investor presentation on its website.
Frankfurt-based Deutsche Bank said this week that it raised its stake in Postbank to about 52 percent following an offer to buy shares from minority investors.