PTI

Mumbai: State-run Union Bank of India has entered into an agreement with Belgium-based KBC Asset Management NV to form a joint venture asset management company in India.

Union Bank will have a 51% stake in the joint venture company while KBC will hold a 49% stake, UBI’s CMD M V Nair told reporters.

“Banks are looking at various opportunities for creating synergies among their different lines of businesses...over the next five years, the Indian retail mutual funds industry is expected to grow at 35-42% CAGR,” Nair said.

With this, the industry is expected to witness an addition of 90-lakh new retail MF customers during the period, he said.

UBI has plans to use 1,000 of its branches for the mutual funds venture in the initial phase and scale up to include all branches in the future, an UBI official said.

UBI already has a JV with Bank of India and Japanese life insurance firm, Dai-Ichi, in which it holds a 23% stake.

Union Bank plans to recruit around 500 marketing executives to strengthen its team for the mutual funds business and is expected to announce the top management of the new company in the next few months, the official said.

The new entity is expected to get operational in the next 3-6 months period after receiving necessary regulatory approvals.

KBC Asset Management NV has assets under management worth Euro 174 billion as on end-2007.