The banking industry’s trust assets continued to grow to P4.70 trillion at the end of June, up by 14.35 percent from P4.11 trillion in the same period last year, driven by market expectations of further monetary easing.
Trust assets are banks’ trust and other fiduciary business and investment management activities.
Based on the latest data from the Bangko Sentral ng Pilipinas (BSP), the highly liquid assets have trust accountabilities worth P1.67 trillion, up by 20 percent from P1.39 trillion previously.
These trust assets are investments in securities issued by the government and private companies. It is an arrangement where a trustee is appointed by a trustor to administer, hold and manage funds or property of the trust for the benefit of a beneficiary.
As of end-June, agency and trust accounts still drive banks’ trust holdings. Under trust accountabilities, unit investment trust funds (UITF) expanded by 36.8 percent to P667.36 billion from P487.52 billion a year earlier. The UITF portfolio, being marked-to-market, is affected by shifts in interest rates and foreign exchange trades.
Agency trusts reached P2.21 trillion, which was 13.9 percent higher compared to the previous year’s P1.94 trillion.
BSP data showed banks’ trust holdings as cash and due from banks increased by 53.6 percent to P650 billion from P423 billion.
Net deposit in banks also went up by 17.6 percent to P1.16 trillion from P988 billion while net financial assets rose 16.9 percent to P2.83 trillion from P2.42 trillion.
The BSP is supervising 20 trust departments of universal and commercial banks while thrift banks operate five trust units. There are also seven trust corporations and three non-bank financial intermediaries monitored by the central bank.
Among the big banks with trust businesses are BDO Unibank Inc. and its affiliates BDO Private Bank Inc. and China Banking Corp.
The two government banks Land Bank of the Philippines and Development Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine National Bank, Security Bank Corp., Asia United Bank, Bank of Commerce, and East West Bank Corp. also have trust departments.
Foreign banks’ subsidiaries with trust units include HSBC, Standard Chartered Bank, Citi Philippines, Deutsche Bank and Maybank Philippines.
In a December 2024 report, the BSP said the trust industry was strongly supported by the active promotion and innovation of trust products and services.
By investment product, most trust clients still preferred UITFs which in 2024, accounted for 14.1 percent or P1 trillion of the industry’s total accountabilities.
The BSP said the industry’s strong operations improved the profitability of trust entities with a combined net profit of P8.2 billion last year, driven by significant increase in fees and commissions.
