Union Bank, Belgium firm to ink mutual fund JV

Union Bank of India has entered into a joint venture with a leading Belgium financial player KBC Group to launch mutual fund business.     

Union Bank chairman M V Nair and Andre Bergen, CEO of KBC Group signed the shareholders agreement to the effect in the presence of King Abert II of Belgium here today.     

Union Bank will have a 51% stake in the JV while the remaining will be held by the Belgian group.
The initial capital of the new company will be Rs 50 cr which would increase as the business expands, bank officials said.     

When asked about the timing of entering mutual fund business when the markets are in turmoil, he said it is the right time to enter the market.

He, however, pointed out he will apply with SEBI for licence to launch mutual fund and operations may commence about a year from now.     

Indian mutual fund industry has been growing  at 47 % year-on-year over the last five years and still the penetration levels are very low indicating the vast untapped potential, he said.     

Erwin Schoeters, managing director of KBC Asset Management, the mutual fund arm of KBC group said one can break even in the mutual fund industry at an asset under management (AUM) of about Rs 6,000 cr.

He said he expected to break even in 3-4 years. He also said that he is not interested in acquiring mutual funds to grow business and would rather do it organically.