China Bank Savings cedes trust license

MANILA, Philippines — The thrift bank arm of Sy-led China Banking Corp. has received the green light from the Bangko Sentral ng Pilipinas (BSP) to surrender its trust license after the business was spun off to another unit.

BSP deputy governor Chuchi Fonacier said the Monetary Board issued Resolution No. 2050 approving the request of China Bank Savings Inc. (CBS) to surrender its license to conduct trust and other fiduciary business effective immediately.

Alex Escucha, senior vice president and head of investor and corporate relations group at China Bank, said the parent company has absorbed the trust portfolio of CBS.

“The parent bank trust business can offer a product to clients and a variation of the same product for savings bank clients — but with lower minimum amounts to invest, precisely for the more retail segment,” he said.

He cited the case of its bancassurance business through Manulife China Bank Life Assurance (MCBL) that offers products to both China Bank, with a variation or lower requirements for the savings bank clients.

“Even if the variation of the product would require a separate approval from both the BSP and the Insurance Commission, that approval process is handled by only one organization, instead of two,” he said.

 The retail lending arm of China Bank began operations in September 2008 following the acquisition of Manila Bank by China Bank in 2007.

Subsequent mergers with Unity Bank and Planters Development Bank have bolstered CBS’s position as a leading thrift bank in the industry.

Escucha said CBS initially decided to retain the trust license so the trust business can be configured to also cater to the retail market.

However, it became clear that the dynamics of the trust business is different, prompting CBS to spin off the trust business to China Bank.

China Bank of the late retail and banking magnate Henry Sy opened 22 branches last year, bringing to 620 the number of branches of China Bank and CBS all over the country.

The Sy-led banking group is opening 29 more branches this year as it continues to beef up its footprint nationwide.