Bajaj Finserv to launch mutual funds business by next year

Bajaj Finserv to launch MF biz

The financial services major plans to start  asset management business by next year and  will invest Rs 50-75 crore in the AMC business with its joint venture partner Allianz.

  • Mumbai,  May 18, 2011  
  • |  
  • UPDATED   10:22 IST

Financial services major Bajaj Finserv plans to launch its asset management business by next year, a top company official on Tuesday said.

"We are working on the launch (of asset management company)...we hope to launch it somewhere next year. I don't have a date more specific than that," Bajaj Finserv Managing Director Sanjiv Bajaj said.

The firm will invest Rs 50-75 crore in the AMC business with its joint venture partner Allianz, he said.

"The important thing is to build a strong retail business that is what we are focused on. We think that is the need and also the longer term opportunity," he said, adding that the company had not finalised team for the AMC.

The firm is also interested in entering the banking business, he said.

"We are still awaiting the new banking guidelines. We will look at it. However, we cannot take a decision unless we see the final guidelines," he said.

Bajaj Finserv plans to disburse loans worth Rs 10,000 crore this year, of which loans worth Rs 800-1,000-crore would be given to Central Bank of India to the retail and small and medium enterprises (SMEs) under a co-financing arrangement, he added.

Bajaj Finserv and Central Bank of India have partnered to co-finance the retail and SMEs loans. As per the alliance, the retail and SME loans would be partially assigned to Central Bank of India.

The firm has reported a 57 fold increase in its standalone net profit at Rs 140.89 crore for the fourth quarter ended March 31 as against Rs 2.46 crore in the year-ago period.

Income from operations declined by 28.88 per cent to Rs 18.86 crore in the quarter ending March 31, 2011 as against Rs 26.52-crore in the same period an year ago.

"The top line has fallen a bit because of our life insurance business. The main reason is the regulation that came in September on unit linked policy, which has significantly reduced commission and as a result require a complete remodelling of the distribution chain.

This resulted in a slowdown in the last few quarters and contributed to the lower premium on life insurance policy," he said.

He added that the current fiscal looked "fine" but expressed caution on the interest rate hike during the second half of the year.

Bajaj Finserv is a leading player in life and general insurance as well as retail finance operating through its subsidiaries -- Bajaj Allianz Life Insurance Company, Bajaj Allianz General Insurance Company and Bajaj Finance Limited, respectively.