Future course

Mumbai, April 24: IDBI Bank will enter the mutual fund business.

“The board of directors of the bank has approved the proposal to enter the mutual fund business and promote and sponsor the proposed fund, the trust/trustee company and the asset management company, either as a wholly owned subsidiary or as a joint venture,’’ the bank said in a statement.

It is understood that the bank may join hands with a foreign partner where it will hold a majority stake.

An entry into mutual funds will enlarge the product bouquet of the bank. Apart from its core business of banking, IDBI has ventured into areas such as stock broking and insurance through its subsidiaries. In insurance, the bank has set up a joint venture with Federal Bank and Fortis, called IDBI Fortis Life Insurance Co Ltd.

In this venture, IDBI owns a 48 per cent stake, while Federal Bank and Fortis have 26 per cent equity each. The company launched its products last year.

In the last two years, banks have strengthened their exposure to mutual funds. Canara Bank has joined hands with Netherlands-based Robeco Groep, while Italy’s Pioneer Investments has tied up with Bank of Baroda to enter the mutual fund industry.

Profit surges

IDBI Bank reported a net profit of Rs 314 crore for the quarter ended March 31, 2009, a rise of 28 per cent over Rs 245 crore recorded in the same period last year.

Total income of the bank stood at Rs 3,734 crore against Rs 2,647 crore in the year-ago period. For fiscal 2008-09, net profit grew to Rs 859 crore from Rs 729 crore, while total income stood at Rs 13,022 crore compared with Rs 9622 crore in the previous fiscal.