Banks’ managed assets drop 10%
The banking system’s trust and other fiduciary business, and investment management fell year-on-year by 10.4 percent to R2.32 trillion as of end-first quarter from R2.58 trillion in the same period last year.
According to the Bangko Sentral ng Pilipinas, 41 big banks account for R2.27 trillion of the total, also down by 10.8 percent compared to the same time last year which amounted to R2.55 trillion. A 10 percent increase or decrease in banks’ managed assets is considered normal.
Of the total assets, universal and commercial banks have cash and due amounting to R176.75 billion, lower than the previous year’s R414.79 billion while deposits in banks of R658.57 billion were higher than R507.94 billion in 2016.
Net financial assets fell to R1.1 trillion from R1.39 trillion while net equity investments and net loans were at R76.15 billion from R85.16 and R39 billion from R37.49 respectively,
The big banks’ “other assets,” however, increased to R222.95 billion during the first quarter versus same time last year of R112.42 billion.
The banking system’s trust accountabilities include unit investment trust funds, employee benefit, pre-need and personal trust, as well as agency trust and other fiduciary services.
The central bank is confident that the trust industry’s holdings will grow over time as markets are acclimatized more to financial products.
BSP Governor Nestor A. Espenilla Jr. said the banking sector is “robust” and has assets that are improving on the back of increasing deposits, profits, and fresh equity.
“No less important, assets grew without compromising their quality,” Espenilla told bankers last week. billion, billion,
The BSP on Tuesday issued a revised trust regulation that would give more flexibility in managing clients’ portfolio.
The revised policy is consistent with the thrust of the BSP to adopt a differentiated regulatory approach based on the major business activities and investment mandate of trust entities particularly “trust,” “advisory,” “advisory with execution” and “execution only” mandates.
The BSP said the new rules should improve the operational efficiency and “promote greater investor confidence in the financial markets.”
The revised circular which expanded the investment outlets and streamlined reportorial requirements is complemented by enhanced disclosures and clearly defined expectations and operational requirements based on the investment mandate of the trust entity. (LCC)