BPI gets securities custodian tag

The Bank of the Philippine Islands (BPI) has been accredited by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) last Aug. 19, 2004, to act as securities custodian pursuant to the provisions of BSP Circular 428. The circular was issued in line with the policy of BSP to promote the protection of investors in order to gain their confidence and encourage their participation in the development of the capital market.

The rules and regulations on the accreditation of banks as securities custodian were promulgated to ensure and enhance transparency of securities transactions.

As a securities custodian, BPI will "keep" securities which are sold, borrowed, purchased, traded, held under custody, or transacted in the Philippines where at least one of the parties is a bank or non-bank financial intermediary under BSP supervision.

The regulatory prescribed very stringent pre-qualification requirements and only three foreign banks and one local bank have been accredited.

BPI is the only local bank to be accredited as independent custodian, and also the first bank, which will act as such through the BPI Asset Management and Trust Group (AMTG).

BPI-AMTG manages over P130 billion in assets and acts as securities custodian for its clients.

Its experience in this field will certainly place BPI in the forefront of the custodianship business.

The bank’s accreditation was due largely to the risk-based capital adequacy ratio (CAR) and unique CAMELS rating of Four. CAMELS rating standard is an internationally-recognized system of rating banks using six categories. These include capital adequacy, asset quality, management quality, earnings liquidity and sensitivity to market risk. BPI has the largest market capitalization among banks in the country and trades at a premium over its book value.