Germany-based Deutsche Bank will be closing its India retail business entirely, a radical change from its South Asian operations. Citing sources, a report by Reuters further said that the bank has sought bids from both domestic and international banks for its retail banking subsidiary with a 17-branch presence throughout India.

The non-binding bid deadline was announced by the bank on August 29, though bid terms are not made public. It will be the second foreign bank pulling out of India's very competitive retail banking market if the sale goes final.

Deutsche Bank cuts costs globally

The decision of proposing to withdraw from the Deutsche Bank India retail business forms part of a larger cost reduction and restructuring program. This year earlier, Deutsche Bank CEO Christian Sewing announced it would shrink branches and axe roughly 2,000 positions globally as part of a cost-cutting effort aimed at improving profitability.

In March, Sewing had emphatically said retail banking businesses, including India's, needed to generate higher returns. It had initially said it aimed at turning its retail business more profitable and is now shifting course toward a possible full sale.

Last try at escape

This is not the first instance when Deutsche Bank has thought of closing shop in India's retail market. Earlier, in 2017, the bank had thought of putting its retail and wealth management business on sale in India but shed the idea.

The new bid is an indication of the growing struggles of foreign banks operating in India, where domestic banks like HDFC Bank, ICICI Bank, Axis Bank, and State Bank of India dominate retail banking services such as savings accounts, loans, and credit cards.

Financial performance of India

The current retail business valuation of the company in India has not been disclosed by Deutsche Bank, but it is reported that its retail business added revenue of nearly $278.3 million during the FY2025. Even if the numbers are very robust, contribution of retail banking is yet minimal when it is compared with the corporate and investment banking of the bank within India.

The German bank collectively generated net revenues of $1 billion from the India business in 2024, placing the country at the same league as Singapore but below bigger markets like Germany, the U.S., and the U.K.

Problems of foreign banks in India

In spite of India being one of the fastest-growing economies and swelling population of wealthy customers, foreign banks have failed to grow retail business here. Market share is meager, and regulatory norms of branch expansion make it tough competition against homegrown banks with vast networks.

Deutsche Bank’s move follows similar exits by other global lenders. In 2022, Citi sold its retail and credit card businesses in India to Axis Bank in a deal valued at over $1 billion. Standard Chartered, too, trimmed its operations last year by selling its $488 million personal loan portfolio to Kotak Mahindra Bank.

Deutsche Bank’s India footprint

Deutsche Bank began operations in India in early 1980s and has built up a robust presence in treasury services, derivatives, private wealth management, and corporate banking. It is now its largest hub outside Germany, and has a staff of more than 22,000 at its back offices, technology centers, and other centers of operations.

Though Deutsche Bank India retail business is likely to go under the axe, the bank is likely to continue with a robust presence in wholesale banking, investment banking, and corporate services. Market observers are of the opinion that this approach is likely to enable Deutsche Bank to consolidate operations and stick to higher-margin businesses.

What lies ahead?

With bids now being invited, the sale of Deutsche Bank India retail business is likely to take shape within a few months. Private sector Indian banks and selective foreign banks are likely candidates based on the possibility of portfolio growth.

It will, however, hinge on pricing, regulatory clearance, and strategic appropriateness for potential buyers. It would mean Deutsche Bank retreating from a line of business that has been troublesome for foreign banks in India, while the country's banking sector has been healthy.

With the developments of this story, everyone will be waiting and seeing which of the lenders emerges to buy out Deutsche Bank's retail assets and what the deal does to India's already competitive retail banking space.

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