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Philippines approves Credit Suisse rep office

Bangko Sentral ng Pilipinas (BSP) has given Credit Suisse a green light to establish a representative office in the Philippines, according to Chuchi Fonacier, the central bank’s deputy governor for supervision and examination.
Chuchi Fonacier, Bangko Sentral ng Pilipinas

The Swiss firm received the approval on 10 November, Fonacier told FSA.

Credit Suisse will be filing its articles of incorporation with the Securities and Exchange Commission before establishing its office in the country.

With a representative office, foreign banks may promote and provide information about the services or products they offer to domestic clients. However, they are not allowed to make transactions in the country, Fonacier said.

“Transactions generated through the promotional efforts of the representative office may be booked only by a branch abroad.”

FSA sought more information from Credit Suisse, but the firm was not able to comment in time for publication.

Besides Credit Suisse, there are 11 other banks that have a representative office in the Philippines, such as UBS, Bank of Singapore, Wells Fargo and DBS.

For UBS, its representative office in the Philippines is focused on investment banking, according to a Hong Kong-based spokeswoman for the firm. The bank does not yet have plans to promote its wealth management services in the country.

Getting to know the market

Credit Suisse is the twelfth bank to enter the Philippines after the country relaxed rules in 2014 for foreign banks, according to Fonacier.

Previously, foreign banks could either own up to 60% of an existing domestic bank or establish a representative office in the country. With the new law enforced, foreign players can own 100% of a bank.

But unlike Credit Suisse, the 11 other banks that entered the country are full-service banks, which means they are allowed to to sell their products to local investors. These banks include South Korea’s Woori Bank, Shinhan Bank and Industrial Bank of Korea, Taiwan’s Yuanta Commercial, Cathay United and First Commercial Bank, Japan’s Sumitomo Mitsui Banking and Malaysia’s CIMB Bank.

There are six other banks − from Indonesia, Korea, Taiwan and China −  that have expressed interest in establishing a presence in the Philippines, according to Fonacier.

Most of these banks tend cater to corporate clients, she said. “For example, a Japanese bank may prefer to cater to Japanese companies, and for the Taiwanese banks, there are also many Taiwanese companies here.”

None of the new banks have expressed interest in addressing the Philippines’ high-net-worth investor base, Fonacier said.

Credit Suisse did not reveal its plans to the BSP.

“Maybe part of Credit Suisse’s reason of having a representative office is trying to get to know more about the domestic market,” she said.

“If banks intend to offer wealth management services, they would have to determine their marketshare first and do a feasibility study if they would really want to establish as a full-service bank.”

There are already existing domestic banks that cater to the country’s rich, Fonacier said, adding that foreign banks may have difficulties in competing against them as the domestic banks have already gathered a number of clients. In addition, domestic investors are more familiar with local brands.

For example, the country’s biggest bank, Banco De Oro, saw its private banking business grow massively in the past 14 years. BDO Private Bank’s AUM grew fifty fold to PHP 350bn ($6.94bn) in 2016 from just PHP 7bn in 2003, according to the bank’s annual report.

Other popular brand names that have private banking or wealth management businesses are The Bank of the Philippine Islands (BPI) and Rizal Commercial Banking Corporation (RCBC).

The number of high net worth investors in the Philippines is expected to grow 40% to about 21,000 by 2026 from 15,000 in 2016, according to Knight Frank’s 2017 wealth report.

Number of HNWIs in the Philippines

Millionaires ($1m+)

Multi-millionaires ($10m+)

UHNWIs ($30m+)

Centa-millionaires ($100m+)

Billionaires ($1bn+)





















Source: Knight Frank

Part of the Mark Allen Group.