Deutsche Bank pumps in Rs 1125cr

Germany's Deutsche Bank has infused Rs 1,125 crore into its Indian operations to tap growing opportunities in infrastructure financing and retail lending. The fresh one is more than double the capital invested by the parent bank in its Indian branches to Rs 2,411 crore.

A remittance of Rs 500 crore has already been effected and the balance of around Rs 625 crore will happen "in the near future". It was in October 2004 that the bank had last injected Rs 419 crore into the local operations.

Gunit Chadha, managing director and CEO, Deutsche Bank India, said, "India is a global priority market for Deutsche Bank and this significant increase in capital is a clear indicator of the bank's strong growth trajectory and its commitment to further development in the country. The capital will facilitate an increase in single borrower limits and risk assets, which will allow us to offer greater local balance sheet financing for our corporate, institutional and retail clients."

The capital funds will take care of the bank's business plans for 2007, according to Chadha. "With the doubling of capital, the bank's balance sheet will grow appropriately," said Chaddha.

The additional capital will allow the bank to provide larger-sized loans towards infrastructure and corporate financing, in the immediate term.

"With infrastructure financing, deal sizes are becoming bigger, hence the need for capital to increase single borrower limits. The capital infusion will increase ability to provide large ticket structured and corporate financing in India," said Chadha.

In the medium-term, the capital will help finance the bank's retail growth as the bank looks to build its consumer finance business in India. Deutsche Bank had recently launched retail banking and credit cards in India.

"These are still early days for retail business. We will increase consumer finance in the coming year," said Chadha.

The bank, which has eight branches in India, has a retail customer base of about 1,00,000 and a credit card base of over 50,000.

The bank's capital adequacy ratio stood at 12.74 per cent as of March 31, 2006. The deposit base was at Rs 4,379 crore and advances at Rs 2,581 crore.

Chadha said, "Deutsche has built a large and diversified business in India and one which we intend to invest in further. Our debt, equity, derivatives, transaction banking and advisory businesses are already at the forefront of the market and we have rapidly growing retail, asset management and private wealth management divisions."