BSP approves Pru Life UK entry into trust business
The Bangko Sentral ng Pilipinas (BSP) has approved British insurer Pru Life UK’s bid to set up a trust unit and allowing the local subsidiary of financial services group, Prudential plc, a firmer hold on the country’s wealth management sector.
The BSP has been encouraging not only banks, but the insurance and financial services players to expand trust institutions and asset management business to further deepen the country’s financial resources. These stand-alone trust corporations are monitored by the central bank.
Pru Life UK President Antontio de Rosas said the BSP approval paves the way for the life insurer’s plan of consolidating client funds. “Our customers, as well as the general public, will benefit from having more financial planning options with Pru Life UK, whether relating to protection, “insuravest,” or investments,” he said.
The new company will be called Pru Life UK Asset Management and Trust Corp., a wholly owned subsidiary of Pru Life UK. “The establishment of the trust corporation will complement Pru Life UK’s insurance business and allow us to provide more value to our customers by offering them a wider range of financial solutions,” said its vice president and chief investment officer Anthony Garces.
Pru Life UK’s local license was granted in 1996 and has since put up over 130 branches across the country and employs 20,000 licensed agents.
Trust corporations are included in the liberalized foreign banking regulation and are allowed to increase ownership up to 100 percent. A foreign insurance company can set up a fully-owned trust corporation.
Based on BSP rules, trust corporations are allowed to set up with only R100 million as initial capitalization, and then build up to R300 million in the course of five years from inception.
The BSP has approved the spin off of trust corporations in 2011 but because of the R300-million minimum capital requirement which banks and asset management firms think too high, there were no applicants until 2015.