Tie-up with SGAM may spur SBI MF growth

The equity tie-up with Societe Generale Asset Management (SGAM) will catapult the growth of SBI Mutual Fund and will lift its assets under management (AUM), said K Ashok Kini, managing director of State Bank of India (SBI), in Ahmedabad on Thursday.

SBI Mutual Fund had offloaded 37 per cent of its stake to SGAM last week, while it retains the remaining 63 per cent. SBI has, however, not finalised any deal for offloading its stake from SBI Capital Markets.

Commenting on the development, Kini said that SGAM will bring in technology, new products and hence new business opportunities.

"It will take some time for SGAM to receive approvals from the Foreign Investment Promotion Board, Reserve Bank of India and Securities Exchange Board of India, after which we will start operating jointly," said Ashok Kini.

He, however, added that no decision has yet been taken on offloading the stake of SBI Capital Markets.

"There are plans to offload the stake in SBI Capital Markets, but SGAM does not figure in those plans at the moment. The issue of selling the stake in the capital markets subsidiary will be handled at a later stage," said Kini, who was at Bavla to inaugurate an agriculture finance cell of the bank.

SBI Mutual Fund's AUM stand at around Rs 5,600 crore and the bank has drawn up plans to increase the AUM to Rs 10,000 crore in the current financial year.

SBI Mutual Fund is expected to launch its portfolio management service in the next few months. The portfolio management service will be a separate division under SBI Mutual Fund and will focus on high net worth individuals and corporates.

The France-based Societe Generale Group has an AUM of over 252 billion euros. It operates in 20 countries, including the US, UK, Japan, China, Thailand, Korea, Singapore, apart from several countries in Europe.

SBI Mutual Fund has an investor base of over eight lakh and an AUM of over Rs 5,600 crore.