Earnings target achievable, AIB says

The Amalgamated Investments Bancorporation (AIB) is optimistic that it would easily achieve its 2006 net income target of at least P10 million this year.

This is lower than the P31 million last year and the P12 million net income in 2004.

AIB assistant vice president for private clients and money markets Zarah Jane D. Dominguez explained that 2005 was an exceptional year with the entry of a major account. And interest rates have been dropping," Dominguez added.

The investment outfit was ranked number one in terms of return on equity (ROE), return on investment (ROI), and net income last year.

AIB believes that 2007 will be another bonanza year.

AIB consists of proprietary trading, investment banking, and private clients and money markets.

In fact, the private clients and money market group accounted for 55 percent of AIB’s income last year.

"The private clients and money market group is the bread-and-butter arm of AIB. It has the best returns on a consistent basis, as it will go the extra mile for its clients," the assistant vice president added.

Individual investment accounts start from a minimum P1 million to P5 million, generally considered the retail level of the commercial banking sector.

AIB will be expanding its client base with its sights at the education sector and other institutions. "They have a steady cash flow and they are knowledgable about the investments."

While continuing to nurture its present individual client base, it is also aware of the next generation of corporates and high net worth individuals.

That means "courtship" of vice presidents and the junior executive levels of corporates, and the wives and children of high net worth individuals.

Private client services is not new but in recent years, more high net worth individuals are availing of the services of investment companies for more options.

From the time AIB started offering the service, their private client service has grown 700 percent. It has also become a lifestyle trend among the rich to have a firm manage their wealth.

Private client servicing is more personalized, more flexible, and more value added to the partnership. The growth of private client services in a way reflects the sophistication required by high net worth individuals in the management of their wealth.

Early this year, AIB entered into a joint venture with the Singapore and Jakarta offices of UK-based Moores Rowland to provide capital market and corporate finance services to medium-sized companies in Southeast Asia.

Moores Rowland is ranked among the top 10 accounting firms worldwide, while AIB is a leading investment bank in the Philippines with an established analyst pool and IT/risk management infrastructure. The joint venture seeks to outsource a significant amount of analytical and transaction processing work to AIB’s existing analyst pool.

Called Moores Rowland AIB Finance Pte Ltd., it will focus to the huge opportunities for middle market firms in Southeast Asia with financing requirements between $20 million to $100 million, as large foreign banks are fighting it out to get a share in the overbanked market of blue chip and top-tier companies. It will be based in Singapore.

This mid-size market segment has been largely underserved by the large investment banks due to its focus on smaller deal sizes, the profitability of which could not cover their large overhead and infrastructure costs. – Ted Torres