BPI sees trust assets growing 10% to over P500 billion this year

MANILA, Philippines - The Bank of the Philippine Islands (BPI) said it expects its assets under trust to reach over P500 billion by end-2010, from P461 billion in 2009.

“We would like to grow by a modest 10 percent this year, after assets grew by 50 percent last year,” Theresa Marcial-Javier, BPI senior vice president and group head of BPI Asset Management, said in a press briefing yesterday.

The total amount of trust accounts managed mainly by banks reached P2.2 trillion as of end-August. Trust accounts are managed by commercial banks and thrift banks that were issued trust bank licenses by the Bangko Sentral ng Pilipinas (BSP).

Trust accounts are either individual or institutional, the most popular trust product unit investment trust fund (UITF).

BPI manages 10 UITF products that amount to over P26.5 billion as of September this year from P25 billion at the start of the year. The group said it hopes to bring it to P27 billion by the end of 2010.

UITF products are invested in fixed income or bonds (in both peso and US dollar denominations), securities or equities, and international fixed income funds.

BPI trust accounts, managed by the BPI Asset Management and Trust Group (AMTG), has a market share of more than 20 percent of the total trust industry.

To sustain its strong share in the trust market, the group reduced its minimum initial investment and maintaining balance to attract more investments.

“We have also invested heavily on scale and technology to cope with increased volumes without sacrifice for quality,” Marcial-Javier added.

The investments were also in preparation for the reduction of the minimum initial investment to just P10,000 from the previous P50,000 for the peso-denominated funds, and from the previous $1,000 to just $500.

Likewise, additional minimum contributions have also been reduced to P1,000 from P10,000, although it maintained the $200 minimum for the dollar-denominated funds.

“We want to democratize our system to allow more individuals to more investment opportunities,” Mario T. Miranda, BPI vice president for AMTG, said.

Miranda likewise revealed that BPI would be launching a new UITF that will be focused on investments designed to address the tuition requirements of individuals.

The failure of the pre-need industry has created a vacuum especially in the education sector through investments for future tuition requirements.

Miranda also said that to help clients build their investments on a regular basis, the bank reintroduced the regular subscription plan (RSP).

After the bank client invests in a UITF, the client can enroll it in the RSP with instruction on how much and the regularity of debiting his bank account into the selected UITF.

“Thus, clients do not have to go to their banks to make periodic placements,” the BPI vice president explained.