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Development
Credit Bank acquires 2000 Citibank home loans
Nisha
Das
30 June 2004
Development
Credit Bank has acquired a portion of Citibank's home
loan portfolio for Rs100 crore to facilitate its entry
into the mortgage financing sector. The deal, which was
finalised recently, consists of a mortgage book of 2,000
loans and will continue to be serviced by Citibank while
the book bought will be reflected in DCB's balance sheet.
A senior company official said that DCB will earn about
12 per cent interest on the EMIs.
According
to Shalinee Mimani, head, retail credit and risk, DCB,
the company has also initiated advanced talks with Tata
Finance and ICICI Bank to acquire their home loan portfolios
for mortgage financing.
Mimani
said, "We have a presence in the personal loan segment
and now we want to grow our retail asset base. This will
be done by expanding our portfolio and mortgage financing
is one sector where we would like to go. We have just
concluded a deal with Citibank and have bought their mortgage
book for Rs100 crore."
According
to senior DCB officials, the bank will launch its mortgage-financing
product in mid-July and will be put under the umbrella
of the 'LoanVantage' brand. They said, "We were looking
at foraying into the home loan sector through acquisitions
and were in fact talking to many players. Initially we
will roll out the service in 10 cities including Mumbai,
Delhi, Bangalore, Chennai, Hyderabad and Kolkata."
Buying
of mortgage books has become a trend recently, where big
banks or NBFCs who have a bigger portfolio and can't accommodate
all of them in their balance sheet, sell some part of
 the
portfolio. The loans sold will continue to be serviced
by the former bank while the book will get reflected in
the buyer's balance sheet.
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of reports on Development Credit Bank
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