The AUM figure accounts for a market share of roughly 20 percent of the total trust operations of the country’s banking system.
From an AUM level of P94 billion in 2001, BPI said it went up to P115 billion the following year. Last year, it increased by another 13 percent to a record P130 billion.
The present AUM level consists of P50 billion in retirement funds, P70 billion in trust and other fudiciary accounts (TOFA), P45 billion in common trust funds (CTFs), P23 billion in mutual funds, and approximately P12 billion under individual and institutional funds.
Trust operations contribute over 10 percent of the bank’s income.
"It is the most profitable area of the bank due to its low or no cost on capital," said Adelbert A. Legasto, BPI senior vice president and head of the asset management group.
The investment mix of the trust funds mainly depends on the type of fund and the risk preference of the client. "We use a system called the model approach, where various types of investment mix are prescribed depending on the fund," Legasto added.
Conservative investments are considered low risk with low returns such as fixed income products and government securities (GS) while probable high returns but high risk investment products are in the equities market.
"Growth has been steady not only in terms of volume but also good in terms of returns, beating both our benchmarks and the market," the fund manager add