BDO acquires trust business of Deutsche Bank

BANCO de Oro Unibank has signed a deal to acquire the Philippine trust business of Deutsche Bank AG, adding more than P70 billion in assets under management and cementing its position as a leading local investment management powerhouse.

In a disclosure to the Philippine Stock Exchange yesterday, BDO said it had signed a definitive agreement for the acquisition of the trust business of Deutsche Bank AG Manila Branch in the Philippines comprising trust, fiduciary and investment management activities. The deal is still subject to closing conditions and applicable regulatory approvals.

Deutsche Bank has more than P70 billion in assets under management as of end2013, BDO president Nestor Tan said in a text message. BDO ended last year with about P770 billion in managed funds, Tan added.

“This should further boost the fee-based revenues of BDO. This is in line with their strategy of focusing on their core operations in light of the uncertainties in trading gains,” April Lee-Tan, head of research at online stockbrokerage COL Financial, said in an email. “Moreover, although the size of Deutsche Bank’s (managed assets) is only around 10 percent of BDO’s, Deutsche Bank’s trust assets are most likely those that earn higher fees so the impact on fees from the business might be more than 10 percent,” Lee-Tan said.

Trust assets that typically generate higher fees are equity funds, balanced funds and bond funds, which most likely account for a large share of the foreign bank’s P70 billion in managed funds, Lee-Tan said.