Mumbai, Jul 14: The public sector lender Union Bank of India (UBI) on Monday July 14, inked a Memorandum of Understanding (MoU) with Belgian KBC Asset Management NM (KBC AM) to form a joint venture company.
UBI would be holding 51 per cent stake in the joint venture company and the remaining 49 per cent will be with KBC AM, the bank said on Monday. July 14. The asset management company will be the second joint venture of the bank after launching its life insurance business in association with Bank of India and Dai-ichi Mutual Life Insurance of Japan.
Commenting on the developments, UBI Chairman and Managing Director M V Nair said, ''By entering into mutual fund business, a ready platform would be available with us for adding value to bank customers. With a captive MF company, the bank would be in a better position to manage the overall needs of the customers, both retail as well as corporate.'' Asked about the credit slow down, he said, a moderate slow down is expected in the first quarter of this fiscal and the net interest margin would be under pressure at around 2.85 per cent.
''A downward pressure on credit growth would be there due to high interest rates, however, in long term it will attain the growth pace when the rates will come down,'' Mr Nair opined.
Credit growth for the first quarter was at 19 per cent for, which is considerably down by the industry growth of 26 per cent. However, the bank expects a credit growth of 22 per cent year-on-year basis, Mr Nair added.