MANILA, Philippines - Assets under management (AUM) managed by the trust department of Philippine banks shrunk 24 percent, or from P3.12 trillion in 2012 to P2.57 trillion last year.
The biggest factor for the decline in value was the migration of special deposit accounts (SDAs) from the trust accounts to various other investment instruments in compliance with regulation laid down by the Bangko Sentral ng Pilipinas (BSP).
The underlying reason for the new regulation was to redeploy the huge liquidity to instruments that may lead to more productive economic use such as loans.
The BSP ruling likewise reduces the maintenance and operational costs carried by the country monetary authority.
Meanwhile, the institution with the largest trust fund was the trust department of BDO Unibank Inc. amounting to P772 billion, or 29.99 percent of total AUMs.
The assets shrunk by a little over five percent from the P816 billion managed in 2012.
BDO executive vice president and Trust and Investments Group head Ador Abrogena explained that the bank already anticipated the weakening of the SDA market.
“We offered new and re-tooled investment products to attract would be migrating SDAs, thus allowing us to retain majority the investment accounts,†Abrogena explained.
Bank of the Philippine Islands (BPI) reported assets worth P575 billion, accounting for 22.34-percent market share. That amount was smaller than the 2012 assets worth P742 billion.
Metropolitan Bank & Trust Co. (Metrobank) remained the third best performer accounting for 12.6 percent of the market with P324 billion worth of trust assets.
However, AUMs shrunk 22.74 percent as compared to assets worth P420 billion in end 2012.
The three banks account for over 60 percent of AUMs in the trust business.
Foreign bank Standard Chartered Bank of the Philippines (SCBP) was the fourth best performing financial institution and among the few that managed to report positive performance.
From P196 billion in AUMS in 2012, these expanded 11.2 percent to P218 billion with a market share of 8.46 percent.
United Coconut Planters Bank (UCPB) was fifth best performer with AUMs worth P94.9 billion and a market share of 3.68 percent.
Philippine Business Bank (PBB) 19th reported an over 300 percent expansion of its trust accounts or from P1.5 billion in 2012 to a P6.8 billion last year, making it the year’s 19th best performer.
Among the government financial institutions (GFIs), the Development Bank of the Philippines (DBP) topped with AUMs worth P64.2 billion and a market share of 2.49 percent. In fact, its trust accounts expanded 16.31 percent last year from the P56 billion it held in 2012.
Land Bank of the Philippines reported trust accounts worth P57.3 billion, and a market share of 2.23 percent.
A trust fund comprises of a variety of assets intended to provide benefits to an individual or organization. It must be managed by a trust licensee, which is issued and supervised by the BSP.
A trust fund comprises cash, stocks, bonds, property and other types of financial products.
The recipient of a trust fund must typically wait until a certain age, or a specified period, or until a specified event occurs, to receive an income from the fund.