Andhra Bank takes 5% in Principal PNB

Hyderabad-based Andhra Bank has picked up a five per cent equity stake in Principal PNB Asset Management Company for Rs 13.25 crore.

Addressing a press conference T S Narayanasami, chairman and managing director of Andhra Bank, said, "The proposed partnership is intended to create a synergy that would develop significant financial and other benefits to the parties."

According to him, the bank will promote and support the asset management company to manage the mutual fund business and market the alliances' products through all the branches.

Sanjay Sachdev, country manager (India), Principal International Inc, said, "Principal Financial Group has reduced its stake in the company from 65 per cent to 60 per cent with the other state-owned banks Punjab National Bank and Vijaya Bank having 30 per cent and five per cent stake respectively."

Narayanasami said that out of the 7,000 branches of the three banks, initially around 50 per cent of the branches would be directly selling the mutual fund products.

Responding to a question, he said, "Though we would promote Principal mutual funds it will not come in the way of selling mutual fund products of other companies as it would be left to the discretion of the customer to choose the product and the company."

He also said that the bank's second campaign 'Principal Andhra Bank New Year Bonanza', which was conducted to increase the fee-based income, was a success.

"In the campaign, which was conducted from November 1, 2004 to January 7, 2005, the bank mobilised 13,500 applications and collected Rs 42 crore," he said.