MUMBAI: India’s shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets.
The German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank’s India unit.
He declined to provide specific numbers, but said the bank has helped deploy “a couple of billion” euros to Indian structured finance deals.
For Deutsche Bank “this is a very, very high level of commitment,” Chawla said in an interview. He expects to grow the size of his book by another 30% in the next two years.
Goldman Sachs Group Inc and Apollo Global Management Inc are among the other global firms to have spotted similar opportunities in India’s bad-debt woes, which have been magnified by the shadow banking crisis that erupted in 2018 with the default of a major infrastructure lender.
As the non-bank finance firms have retreated, Indian companies have been struggling to obtain credit, curbing wider economic growth. — Bloomberg
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