Bancassurance is a business alliance between two financial institutions such as a bank and an insurance company.
Banks can utilize the insurance products as one of its consumer or retail product to attract depositors while insurers can use the customer base of the bank to introduce its products. Likewise, insurance companies can tap the bank’s expertise for its investments.
Chinatrust Phils. President Joey A. Bermudez said that the bank is open to forging a bancassurance alliance with any insurer that offers the best arrangement for both parties.
"Bancassurance is an opportunity that globally Chinatrust has been looking at," Bermudez said in an interview. He added that if there are any attractive propositions for bancassurance "we will take a look at it."
Bancassurance partners — both the insurance company and the bank — always look at ways to strengthen each other and expand their respective customer base. The insurance company would like to effectively use the distribution network of the bank, and vice versa.
However, Bermudez admitted that there were legal constraints to working out such an arrangement. The Bangko Sentral ng Pilipinas (BSP) has not openly allowed for such an arrangement.
Last week, the BSP said it was poised to issue guidelines allowing for bank’s subsidiaries to be peddled in their branches based on Section 20 of the 2000 General Banking Law.
When implemented, branches can become marketing tools for selling the bank’s non-allied undertakings of its subsidiaries like real estate and insurance. However, this will need direct supervision with the BSP.
Meanwhile, Bermudez said the bank registered a net income P183.2-million in the first nine months of the year, up by 22.55 percent compared to P149.49-million in the same period last year.
Total deposits increased by 118 percent to P2.433-billion in the same period compared to P1.116 billion recorded from January to September 2000.
Earnings per share grew from P0.80 in the first nine months of 2000 to P0.93 per share in the same period this year.
Chinatrust Phils. has an existing branch network of 18, and it is scheduled to grow by five branches per year starting 2003.