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Banks’ trust assets drop 8% in Q1 to P2.449 billion

The banking sector’s trust holdings declined by 7.79 percent in the first quarter this year to P2.449 trillion from P2.656 trillion same time in 2019, data from the Bangko Sentral ng Pilipinas (BSP) said.

The big banks or the universal and commercial banks accounted for P2.425 trillion of the total bank-managed assets. This was also down from P2.607 trillion end-March last year or by 6.98 percent.

The rest are trust holdings of thrift banks amounting to P24.16 billion which was a large drop from same time last year of P48.81 billion or by 50.50 percent.

The banking system’s deposits in banks and net financial assets decreased by 4.4 percent year-on-year to P748.37 billion and by 10.27 percent to P1.38 trillion, respectively, while net loans went up by 28 percent to P51.68 billion.

The industry trusts holdings overall was up by 9.64 percent to P1.08 trillion from P985.37 billion, of which P562 billion are unit investment trust funds (UITFs). UITFs increased 41.92 percent compared to P396 billion last year.

Under trust accounts, employee benefits totaled P271.62 billion from P272.62 billion while personal trust and pre-need fell by 35.77 percent and 7.97 percent year-on-year to P113.39 billion and P75.15 billion, respectively.

Based on BSP data, the big banks’ trust accounts end-March went up by 9.93 percent to P1.07 trillion from P976.30 billion same time in 2019. UITF holdings increased 42.96 percent to P560.86 billion from P392.30 billion.

Employee benefits, personal trust and pre-need all declined by 0.31 percent, 35.71 percent and 7.99 percent to P267.94 billion, P112.84 billion and P74.32 billion during the first quarter period.

Thrift banks’ trust accounts also decreased by 31.45 percent to P6.21 billion end-March versus P9.06 billion last year.

Last year, the banking sector’s total trusts and investment management activities reached P2.92 trillion, up 13 percent from 2018’s P2.56 trillion.

The industry’s asset structure is largely influenced by the 46 big banks which is almost 60 percent of gross loans, about 24-25 percent of total financial assets and the rest are cash and due from banks.

Last month the BSP has decided to allow trust corporations to sell and distribute UITFs through third parties such as individual and institutional agents.

BSP Governor Benjamin E. Diokno said this policy will enable agents to “bring products closer to investors” and help the industry to “grow assets under management through partnerships with distributors”.  

Diokno said BSP is about to “revamp” the regulatory framework for trust, investment management and other fiduciary accounts by “clearly laying out the expectations for the different activities performed by trust entities and streamlining regulatory requirements.”

Before the new circular was approved, trust corporations can only distribute UITFs in their main branches or offices.


Source: Manila Bulletin (https://mb.com.ph/2020/10/06/banks-trust-assets-drop-8-in-q1-to-p2-449-billion/?utm_source=rss&utm_medium=rss&utm_campaign=banks-trust-assets-drop-8-in-q1-to-p2-449-billion)

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