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Punjab National Bank has signed an agreement with Principal Financial Group to sell its stake in mutual fund joint venture for an undisclosed amount. The deal will give Principal full ownership of the Principal-PNB asset management company and Principal Trustee Company in India.
Punjab National Bank had 21.38 per cent stake in Principal PNB AMC. Principal PNB Mutual Fund has asset of Rs 5,825 crore under management as of September quarter-end. Pedro Borda, President, Principal south-east Asia and India said Principal has been assuming increased ownership in the asset management company over time and will continue to invest and grow in India. Principal has been in India for nearly 20 years.
With over $530.3 billion in assets under management, the US head-quartered Principal serves 19.9 million customers worldwide through a network of financial professionals and a diverse family of companies with offices in 18 countries.
“India’s large emerging middle class has a growing need for and interest in long-term saving and investment products,” said Borda.
"We look forward to leveraging our global expertise in retirement and asset management to help Indians achieve their personal investment goals and greater financial security.”
In the future, Principal India is planning for even more digital innovation to help advisors serve their customers better, and give customers greater access to manage their finances online, he said.
Bad debt laden public sector banks have been selling or consolidating their non-core asset to raise capital before seeking Government funding. Earlier, Bank of Baroda bought out its joint venture partner UniCredit’s entire 51 per cent stake in Baroda Pioneer Asset Management Company and Baroda Pioneer Trustee Company with a possible intention to launch an initial public offer.
Union Bank of India, which acquired its Belgium-based mutual fund joint venture partner Participations Rental SA, sold 40 per cent stake in its mutual fund business to Dai-ichi Life Insurance Company of Japan.
The seven public sector bank-sponsored mutual funds include Baroda Pioneer Mutual Fund, BOI Axa Mutual Fund, Canara Robeco Mutual Fund, IDBI Mutual Fund, SBI Mutual Fund, Union Mutual Fund and Principal (Punjab National Bank) Mutual Fund.
The assets under management of these seven mutual funds were up 11 per cent in the September quarter at ₹2.34 lakh crore against ₹2.10 lakh crore in the June quarter.
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