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Home / India News / 2007 / March / March 19, 2007
Canara Bank and Robeco Join Hands for Joint Venture in AMC Business

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Canara Bank and Robeco Join Hands for Joint Venture in AMC Business

New Delhi, Delhi, India

Canara Bank and the Netherlands based asset manager Robeco Groep NV today signed a Memorandum of Understanding (MoU) for a joint venture to undertake asset management business in India. The announcement was made at an event organised by the partners in New Delhi in the presence of Shri P Chidambaram, Hon'ble Union Finance Minister, Hon'ble Ministers of State, Finanace, GOI, Shri Pawan Kumar Bansal and Shri S S Palanimanickam, Shri Ashok Jha, Finance Secretary GOI, and, Shri Vinod Rai, Secretary,Financial Sector. This event was attended by senior officials of the Finance Ministry and both the institutions.

The new company, called 'Canara Robeco', aims to position Canara's existing asset management arm, Canbank Investment Management Services Ltd (CIMS), into an industry leader. Robeco Groep NV has competence in discretionary asset management services in both retail and institutional segments, operates in 9 countries with Assets Under Management (AUM) of USD 185 billion (approx. Rs. 8,32,500 crores). Robeco Groep N.V. will invest to the extent of 49% in the equity of CIMS, which is at present a 100% subsidiary of Canara Bank.

The mutual fund industry in India is undergoing a boom phase, with assets under management more than doubling between 2004 and 2006. The total AUM of the mutual fund industry as at Jan 2007, is over Rs. 3,30,000 crores. Buoyed by the strong macroeconomic fundamentals, India's mutual fund industry features about 30 lead players. Fast expansion in the Indian middle class, estimated at over 200 million, and the demographic shifts are two major triggers for the mutual fund industry to sustain its growth momentum in future. Banks, as leading players in the financial sector, are eying this industry as one of the most potent segments, better value proposition to clients, and, as an additional pool of non-interest income.

In his welcome address, Shri M B N Rao, Chairman and Managing Director, Canara Bank, said, "This partnership is complementary in nature to synergise the core competence of both the partners and leverage the high market potential. Canara Bank's long standing relationship with a large number of financial institutions, and client base of about 29 million, a network of over 2,550 branches across the country and an enviable track record for over 100 years will help the size of the business, while Robeco, with its wealth of experience and asset management expertise will focus on generating higher margins on that volume through strategic actions, operational and process improvements". He added, "The signing of the MoU today to promote a JV in asset management marks a significant step forward for Canara Bank in terms of creating and delivering value added asset management products to the growing number of investors".

Rabo India Finance Limited is the sole advisor to Robeco and Ernst and Young are the advisors to Canara Bank for this strategic alliance.

Mr. George Moller, Chief Executive Officer of Robeco Groep NV, said, "Robeco sees the Indian market as having sizeable business potential. With global focus now directed towards India, it is increasingly more attractive for global players to create synergies of success between themselves and the strong Indian partners. To this effect, Robeco has planned to enter India's mutual fund industry via this promising joint venture."

The proposed inaugural product strategies will offer a comprehensive range of schemes comprising plain vanilla funds and a flagship fund in every major asset class. The next phase envisages plain vanilla funds with a 'twist', followed by structured and alternative products. With the development of the pension market a distinct reality, the JV will offer index funds as well.

About Canara Bank:

Canara Bank, established way back in 1906, is today the largest nationalized bank in India in terms of aggregate business comprising of deposits and loans. It has an asset size valued at about USD 30 billion as at 31st March 2006. 73.17% of the Bank's ownership is with the Government of India. Known for its strong fundamentals and sound business policies, Canara Bank has the distinction of posting profits every year since inception. The Bank has a net work of over 2,550 branches nation-wide and 47,000 employees serving about 29 million customers.

The Bank offers today a host of e-enabled delivery channels, including 996 ATMs, 1315 Anywhere Banking Branches and more than 1100 branches offering Internet and Mobile Banking facilities.

About Robeco:

Robeco Group N. V. is a leading international asset manager, headquartered in Rotterdam (Netherlands) with USD 185 billion assets under management and over 1,500 employees in 9 countries; and a profitability of over USD 300 million. It provides investment products and services to around 700 institutional and 1.5 million private clients worldwide.

Robeco provides discretionary asset management products and services, as well as a complete range of mutual funds to a large number of institutional and retail clients worldwide. Robeco's product range encompasses fixed-income and equity investments as well as balanced accounts, money market funds and alternative investments.

Robeco has consistently pursued a profitable growth strategy, emphasising organic growth through acquisitions as opportunities arise. Founded in 1929, Robeco is the centre for asset management within the Rabobank Group and has full operational independence. The combination of the highest ratings from the international rating agencies and the highest Sustainability Cluster Score within the banking sector reflect the high value add Rabobank offers its stakeholders.

Robeco distributes its funds for the retail market directly and through other financial institutions. Several of its mutual funds, including the flagship Robeco N. V., are listed on major European stock exchanges such as Amsterdam, Paris, Frankfurt and London.

Denis Rodrigues, Deputy General Manager, Canara Bank, + 91 (080) 2248 4581 / + 91 94488 44632

Sunher Thanawalla, Associate Director and Head - Corporate Communications, Rabo India Finance Limited, + 91 (022) 2203 4567 / + 91 98213 41052

Source: Robeco Group N.V. (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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