Mumbai: The state-run lender Punjab National Bank (PNB ) restructured its insurance and mutual fund joint ventures by buying out its partners’ stake from the insurance venture and selling its entire stake in the mutual fund distribution joint venture, the bank said in a release on Thursday.
PNB bought its partners’- Principal Financial Group Mauritius (PFG) and U K Paints--stake of 26% and 32%, respectively, from the insurance joint venutre, Principal PNB Life Insurance Company.
“After taking over the stake from PFG and others, PNB’s holding in Insurance Broking Company is now 81% and in Principal PNB Life Insurance Company Ltd is 88%,” PNB release stated.
The bank is now looking at strategic partnerships in life and non-life insurance business and has also invited expressions of interest for the same.
The Delhi-based bank also bought Principal’s 26% stake and Berger Paints’ 25 % in the Insurance Broking Company.On the other hand, PNB sold its entire 30% stake in mutual fund distribution venture to Principal, thereby exiting from the business.
However, the bank has retained its stake in Principal PNB Asset Management Company.
The bank will also continue to distribute products of Principal PNB Asset Management company for next three years.
PNB and another state-run lender Vijaya Bank had entered into a partnership with Principal for life insurance and mutual fund joint ventures some years back.
However, the joint ventures had run into rough waters and the banks wanted to exit the alliance since the last few years.
“Punjab National Bank had signed a Memorandum of Agreement with Principal Financial Group of Mauritius (PFG) and Vijaya Bank for restructuring of their existing joint ventures on 23 June 2010,” the bank said in the release.