RCBC wealth group eyes P120 B in AUMs

MANILA, Philippines - The Wealth Management Group of the Rizal Commercial Banking Corp. (RCBC) is eyeing a wealth or asset under management (AUM) portfolio worth P120 billion by 2016.

The Wealth Management Group, or the private banking arm of RCBC, is presently taking care of a portfolio worth P51.5 billion. That is already a 28-percent increase from the previous value at the end of 2010.

Manuel G. Ahyong Jr., RCBC head of Wealth Management Group, admitted that the more than 100 percent increase in AUMs in the next four years was a “stretched” target.

“This is clearly a stretch target but we have built a strong foundation in the last five years to carry the momentum forward and achieve more,” Ahyong said. “So, we are targeting to more than double our AUM at the end of 2016 or a yearly compounded growth rate of about 18.5 percent year after year from 2012 to 2016.”

The wealth management group was formed in 2007.

Private banking caters to the high net worth individuals, who are looking for a slew of investment options.

These include, among others, fixed income, securities, insurance, trust funds, mutual funds and estate planning services. And these portfolios are placed in peso denominated and other currencies investments.

Private banking puts great emphasis on investments that best suits the individual’s appetite, based on specific tactical or strategic goals. Thus, the wealth manager must look for the best investment that suits the high net worth client.

“We have an open architecture platform, where we also make available and offer third party products and investments. By doing this, we are actually enabling our clients to have a wider array of investment options to choose from as part of enhancing our services to our valued, high net worth clientele,” the group head said.

Critical for a bank’s private banking arm is its agents otherwise known as relationship managers (RM).

Ahyong did not divulge the RM base but instead admitted that they were still in the recruitment mode.

 “RCBC is still recruiting more RMs and expanding our network as we selectively branch out to areas where there is a concentration of high net worth individuals. We just added a seventh wealth management office in Davao at the beginning of this year,” he admitted.

The group head also revealed that RCBC is developing a training program specifically for officers and staff in wealth management. It is also enhancing its information technology (IT) systems to address growth and sophistication in the coming years.

Ahyong admitted that the group’s continued growth is attributed to a number of key strategies as well as a robust economy.

“Our confidence in attaining our long-term targets rests in part on the country’s positive economic outlook and healthy investment climate,” he added.

The Philippine economy has been growing for 53 straight quarters despite the recession in some developed countries and some Asian countries in 2008 and shortly thereafter.  

It continues to enjoy a favorable outlook overseas and the prognosis is still quite good looking forward, amid continued improvements in economic and credit fundamentals, especially in terms of stronger external position and fiscal performance.  

A strong services sector and an unhampered growing remittance business have lifted the economy over the years.

The services sector is equivalent to 56.2 percent of gross domestic product (GDP), and one key player is the business process outsourcing (BPO).

 Revenues from the BPOs grew from $1.3 billion in 2004 to $11 billion in 2011 and expected to increase further to $13 billion in 2012, or 10 times in eight years.  

Remittances from overseas Filipinos continues to fuel personal consumption and spending. It more than tripled over the past decade, from $6 billion in 2001 to $20 billion in 2011 and expected to increase to $21 billion this year.

Ahyong said that public spending especially on social services and infrastructure will add more economic activity. 

Interest rates are still near record lows which is good for borrowers, help spur more economic activities and support the financing needs of the growing economy.  

“Meanwhile, the Philippine Stock Exchange (PSE) is one of the best performers in Asia to date, with a gain of 15 percent so far. Having said that the four to five percent growth target for the Philippine economy is definitely achievable,” the RCBC private banker added.