Vijaya Bank plans to exit mutual fund venture

Vijaya Bank plans to exit mutual fund venture

Mumbai: State-run Vijaya Bank plans to sell its stake in Principal Pnb Asset Management Co. Pvt. Ltd, the bank’s chairman and managing director Prakash P. Mallya, said on 29 August.

“It has not been beneficial," he said, adding the venture, in which it holds a 5% stake, has not generated enough income for the bank. “I would like to quit gracefully".

Mallya said the asset management company’s joint venture partners as well as other parties had shown interest in Vijaya Bank’s stake.

“There are already people who are after me," he said.

Principal Financial Group and state-run Punjab National Bank are the other partners in the joint venture.

The fund house’s assets rose 46.28% to Rs17322 crore in year to July-end, data from Association of Mutual Funds in India showed.

Mallya also said the bank was considering various options including getting into a separate joint venture asset management company and the final decision would be taken in a month’s time.

The industry, which has attracted international asset managers such as AIG and JP Morgan this year, managed assets worth about Rs4.87 trillion at the end of July.

Vijaya Bank, which raised Rs200 crore in July, may raise another Rs500 crore during the current fiscal, Mallya said.

It also expects to recover Rs375 crore from its non-performing assets, totally worth Rs548 crore, during the current fiscal and has already recovered Rs730 crore during the first quarter, he said.

Shares in the bank ended 0.09% up at Rs53.20 in the Mumbai market.