PSU banks aggressively sell their associate AMC’s funds

An analysis of associate AUM data of AMCs and AUM data of distributors implies that public sector banks aggressively promote schemes of their associate fund houses.

Our analysis shows State Bank of India, Canara Bank and Union Bank contribute the highest assets to their associate AMC.

SBI MF derives AUM of Rs.1.91 lakh crore from its associate distributor in March 2024. Interestingly, the State Bank of India has a mutual fund book size of Rs.1.74 lakh crore in March 2024.

The ratio of the AMC’s associate AUM to associate distributor ‘s MF book size is 110%.

Similarly, Canara Bank and Union Bank have associate AUM to associate distributor MF book size ratio of 109% and 105% in March 2024, respectively.

Bank of Baroda and Bank of India also associate AUM to associate distributor MF book size ratio of 97% and 95%, respectively.

In comparison, such a contribution in private sector banks and associate distributors is much less. Aditya Birla Finance (55%), ICICI Bank and ICICI Securities (44%), Axis Bank and Axis Securities (38%), Kotak Bank and Kotak Securities (28%) and HDFC Bank and HDFC Securities (28%) are some examples.

Among others in the top 15 list are HSBC Bank, MOSL Wealth and MOSL Financial Services, Mahindra & Mahindra Finance, JM Financial Service and NJ Indiainvest.

Let us look at the table to know more:

Note 1: Data as on march 2024

Note 2: The ratio of associate AUM to associate distributor MF book size doesn’t indicate that associate distributor only sells schemes of their associate AMC. But comparing both the figures give idea on their affinity towards associate AMC.