One such foreign player is the Hongkong Shanghai Banking Corp. Ltd. (HSBC) which has been expanding its presence in the country despite uncertainties in the country’s economy.
"If it (bancassurance) makes sense to us, yes we are interested," said David Eldon, HSBC chairman and HSBC Holdings Plc director. Eldon was guest speaker in a forum sponsored by the Makati Business Club (MBC).
Eldon said their decision on bancassurance will depend largely on the new BSP regulations. After much debate, the BSP has not released the much-awaited rules and regulations on bancassurance or cross-selling.
It is considering allowing foreign banks to engage in cross selling as long as they have a minimum five-percent stake in the insurance company. The BSP had earlier said that local commercial banks could sell the products of insurance companies that are their subsidiaries.
Thus, banks must control at least 51 percent of the insurance firm. The proposed regulation however bans thrift banks from engaging in cross-selling.
"If the regulations allow foreign financial institutions or banks to enter the bancasssurance market with only a certain percentage of the insurance company, that is what we have to do, if it makes sense to us," the chairman of the global financial institution said.
HSBC has been aggressive in expanding its network in Asia, which it considers a high-demand area for its financial products. It has acquired an eight-percent stake in the Bank of Shanghai, one of the major players in China’s banking system.
It is also trying to acquire a minority stake in Ping An Insurance, said to be the second largest insurer in China.
Peter Lawrence, head of HSBC’s financial operations in the Philippines, confirmed their desire to enter the bancassurance market. He said they are prepared to take significant steps. "But what are the regulations that will allow us to operate in that market."
In the Philippines, HSBC acquired in 2000 the former PCI Savings Bank for $22 million. It was subsequently renamed HSBC Savings Bank.