In 1995, Santander Central Hispano, the largest Spanish bank, established Banco Santander Philippines as its local banking subsidiary. In the same year, Santander Investment, S. A. entered the Philippine securities market with the incorporation of Santander Investment Securities Philippines, Inc. with a member-seat at the Philippine Stock Exchange.
With corporate offices located at the 27/F Ayala Tower One, Ayala Avenue, City of Makati, BSPI and SISPI operated as a commercial bank and a securities brokerage company respectively to a select niche group of discriminating corporate and individual customers seeking only the highest quality of investment products and services in the banking industry.
The Santander Group’s strict adherence to global banking standards has made it known in the Philippine banking industry as the pioneer in the origination and distribution of fixed income securities. In August of 2003, Banco de Oro Universal Bank acquired the local banking unit of Banco Santander with its commercial, trust and derivatives licenses to become BDO Private Bank.
Simultaneously, BDO Capital acquired Santander Investment. Securities Philippines, Inc. from Santander Investment, S. A. for its securities and brokerage licenses to become BDO Securities Corporation. With the acquisition of the 2 vehicles, Banco de Oro was prepared to deliver new products and services to a select group of discriminating investors… the Private Bank customer.
The business of Private Banking involves 2 market segments: Private Banking customers with a minimum investment wallet size of 3 million US dollars, and the Modern Affluent market with a minimum investment wallet size of 100 thousand US dollars. The Private Banking market has an estimated size of 10 billion US dollars, while the Mass Affluent market is about 8 billion US dollars. Combined, this market is approximately 1.0% of the domestic population. BDO Private Bank is focused on this market.
It is evident that the domestic banks have recognized the potential of this market with the proliferation of various business units solely catering to the Private Banking needs of these individuals. Likewise, offshore banks, who have recognized the business potential much earlier, have established relationships with several key customers in this market.
Our clientele are mainly businessperson, entrepreneurs, business executives, professionals and retirees with a minimum wallet size of 10 million pesos. They are discriminating in lifestyle, as evidenced by their prudent selection of banks, financial institutions, securities brokers/dealers, insurance companies, financial and investment advisors. They recognize that there is delicate balance between risk and return on investments.
Their investment portfolio, determined by their investment needs and risk appetite, is mainly composed of deposits, investment in fixed income and equity securities. They have also started investing in derivative instruments. BDO Private Bank applies the Open Architecture Approach to focus on the wealth management relationship with the clients. Recognizing that the bank will have limited transaction capabilities, it will draw from the power and strength of other BDO business units and subsidiaries to complement its suite of products and services. Likewise, the bank will open relationships with domestic and offshore foreign affiliates to complement its suite of investment products and services.
BDO Private Bank will be consolidating, protecting and expanding the relationship with clients through financial planning, investment advisory and execution, and tax and estate advisory services. The primary goal of BDO Private Bank is to create market share in the Private Banking/Modern Affluent Market segment by penetrating key areas in BDO’s network.
The Private Bank likewise extends itself as the vehicle to deepen and expand relationships with existing clients by offering the products and services of a private banking institution, otherwise not serviced by the current menu of products available in the main bank. The aim of the Private Bank is to complement and explore how the BDO Group can service all the financial and investment needs of the client.
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