The Europe-based financial group has agreed to sell its stake in an asset management business to Union Bank of India.

Union Bank of India and Belgium-based KBC Asset Management have reached agreement on the sale of KBC Asset Management’s 49 per cent stake in Union KBC Asset Management, the joint venture established between both companies in 2009, and Union KBC Trustee Company, to Union Bank of India.

The transaction, which is still subject to regulatory approval in India, will have no impact on the joint venture’s client positions and product portfolio. It will not have any material impact either on KBC Group’s earnings and capital. Both parties agreed not to disclose any financial details about the deal, a statement from the businesses said yesterday.

The statement suggested that India's investment funds market has proven to be challenging as a field in which to build business, citing market movements. "KBC and Union Bank of India have always stated their firm belief in the potential of the Indian market for investment funds. Nevertheless, market developments in India have altered the financial landscape in which the joint venture was established. KBC, together with Union Bank of India and in close collaboration with the joint venture’s management, has discussed all possible options with a view to finding a solution which addresses the concerns of all stakeholders," the firms said.

Arun Tiwari, chairman of Union Bank of India, reiterated the commitment of Union Bank of India towards offering a portfolio of services to the investors under its own brand.

KBC Asset Management is a 100 per cent subsidiary of Belgium-headquartered KBC Group. It is mainly active in KBC’s home markets of Belgium and Central and Eastern Europe, and is also present in Ireland and Luxemburg. On 30 June 2015, KBC Asset Management had over €200 billion ($223.6 billion) of client assets.