Bank sponsored fund houses paid gross commission of Rs.800 crore to their banking channel distributors in FY 2016-17, shows an analysis of annual commission disclosure of individual fund houses.
The commission paid by the AMCs to their sponsor banks increased by Rs.362 crore or 83% in the FY 2016-17.
Experts attribute this growth to the introduction of forward charge mechanism, mark to market gains and steady inflows in equity funds. The assets under management of the mutual fund industry rose 42% in FY 2016-17, i.e., from Rs.12 lakh crore to Rs.18 lakh crore. Moreover, equity funds recorded net inflows of Rs.1.31 lakh crore while it witnessed inflows of Rs.1.02 lakh crore in the preceding fiscal.
ICICI Prudential Mutual Fund, the largest fund house in terms of AUM, paid the highest commission of Rs.193 crore to ICICI Bank last fiscal as against Rs.103 crore in FY 2015-16, a growth of 86%. The fund house has also paid the highest commission of Rs.738 crore to its distributors in FY 2016-17.
SBI Mutual Fund followed ICICI Prudential Mutual Fund. The fund house paid Rs.175 crore to SBI as against Rs.61 crore in FY 2015-16 i.e. a growth of 190%. SBI bank has received gross commission of Rs.179 crore in FY 2016-17. This indicates that the bank has received almost 98% of its total commission from its subsidiary fund house.
HDFC Mutual Fund, the largest fund house in terms of equity AUM, paid Rs.168 crore or 23% of its overall commission paid to its sponsor HDFC Bank. In FY 2015-16, the fund house paid Rs.91 crore to HDFC bank. HDFC Bank is the second largest distributor in the country and earned a gross commission of Rs.397 crore from all AMCs. It received 42% of its total earnings from HDFC Mutual Fund.
In terms of percentage, IDBI bank has witnessed the highest increase in commission received from its subsidiary fund house. The fund house paid Rs.14 crore to its sponsor last fiscal compared to Rs.5 crore in FY 2015-16, an increase of 208%. IDBI Bank received a total of Rs.21 crore as commission.
Surprisingly, Canara Bank received almost 100% of its gross commission from Canara Robeco Mutual Fund. Of total commission of Rs. 16.65, Canara bank received 16.54 crore from its subsidiary fund house.
The only bank sponsored fund house to witness a fall in its commission paid to its sponsor is Kotak Mahindra Mutual Fund. The fund house paid Rs.42 crore in FY 2016-17 as against Rs.45 crore in FY2015-16. 21% of gross commission received by Kotak Mahindra Bank came from Kotak Mahindra Mutual Fund.
HSBC received the minimum contribution from its fund house among all the bank-sponsored mutual funds. It received only 18% of its commission from HSBC Mutual Fund.
Here is the gross commission top 10 fund houses paid to their sponsor banks (in Rs crore)
|
Name of the fund house |
Commission paid to sponsor banks in FY 2016-2017 |
Commission paid to sponsor banks in FY 2015-2016 |
Change |
Change% |
|
ICICI Prudential
|
192.52
|
103.39 |
89.14 |
86.22 |
|
SBI |
175.46 |
60.64 |
114.82 |
189.34 |
|
HDFC |
167.89 |
90.65 |
77.24 |
85.21 |
|
Axis |
151.43 |
92.01 |
59.42 |
64.58 |
|
Kotak Mahindra |
42.15 |
45.23 |
-3.08 |
-6.81 |
|
HSBC |
18.46 |
16.82 |
1.64 |
9.78 |
|
Canara Robeco |
16.54 |
10.52 |
6.03 |
57.34 |
|
IDBI |
14.29 |
4.64 |
9.65 |
208.32 |
|
Union |
8.07 |
5.56 |
2.52 |
45.36 |
|
Baroda Pioneer |
6.73 |
3.48 |
3.25 |
93.51 |
|
BOI AXA |
4.52 |
3.50 |
1.03 |
29.35 |
|
Total |
798.09 |
436.43 |
361.67 |
82.9 |
Source: company disclosure
