Mumbai: State-run Union Bank of India and Belgian’s KBC will jointly invest 50 million euros in their newly formed mutual fund joint venture in India, top officials said on Friday.
The joint venture, in which Union Bank would own 51% and KBC’s asset management arm the rest, is expected to get market regulator Securities and Exchange Board of India’s approval in four to five months, Union Bank chairman and managing director M.V. Nair told reporters.
“The money will be invested after we get final approval from market regulator,” Nair said.
The joint venture would offer KBC approved capital protected investment funds, open-ended equity funds and other structured products for retail customers, KBC Group’s chief operating officer Danny De Raeymaeker said.
“India is a fast growing market and we are yet to tap most of the assets,” Raeymaeker said.
The joint venture company would target Rs120 billion of assets under management in the next 3 years, a market share of 3% at the end of fifth year of operations and break even by the fifth year of operations, the companies said in a statement.
Nair said the bank would train 500 people and place them in equal number of branches to sell mutual fund products.
“We will tap our client base of 26.5 million,” he said.
The bank is adding 3 million clients every year and is targeting a credit growth of 25% in 2010-11, he said.
At 12.25 p.m., Union Bank shares were 2.22% down at Rs283.70 in the Mumbai market that was up 0.3%.