Banks’ managed assets down 12%

Banks’ trust and investment management units posted lower asset holdings end-June this year of R2.38 trillion, a 12.25 percent decline from same period in 2016 of R2.72 trillion, based on Bangko Sentral ng Pilipinas (BSP) data.

The country’s large lenders accounted for R2.34 trillion of the total banking industry’s asset holdings, the rest are from thrift banks.

The total banking system’s asset holdings were only slightly more or up 2.58 percent when compared to end-March of R2.32 trillion. Market risk appetites and volatility including foreign exchange and interest rates risks affect banks' assets and trusts investments.

Overall industry accountabilities as trusts amounted to R1.3 trillion, down by 21.21 percent year-on-year from R1.65 trillion. Banks’ unit investment trust funds or UITF totaled R623.75 billion as of end-June versus R751.18 billion last year.

Trust holdings in the preneed sector, in the meantime, amounted to R76.3 billion and employee benefit was R239.92 billion. Bank clients’ personal trusts totaled R310.58 billion.

Last year, pre-need trusts were higher at R113.67 billion, while employee benefit and personal trusts totaled R325.48 billion and R404.71 billion.

The BSP issued a new financial reporting package (FRP) for trust corporations, which was adopted this month. These companies are authorized by the central bank to engage in trust and other fiduciary business. They are now required to prepare the FRP for their proprietary activities on solo basis or the combined financial statements of the corporation’s head office and branches.

The solo basis reporting is every quarter and the FRP structure includes both pesodenominated accounts and foreign currency denominated accounts.