A comparative study on the profitability of savings and mortgage banks engaged in trust services under the new minimum capital requirements and savings and mortgage banks not engaged in trust services for the period 2004-2008

• Main Authors: Camacho, Gerard Joseph, Clapano, Gerheardt Jacques, Leonor, Ark Israelle, Manansala, Joseph
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Savings accounts > Philippines; Banks and banking > Philippines; Bank accounts > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18416
• Institution: De La Salle University

On April 5 of 2002, the Banko Sentral ng Pilipinas (BSP) released circulars on the revised and updated information with regard to the prerequisites for banks planning on applying for a trust licensure. One type of bank that was included in BSP's circular that was approved to offer trust is the thrift bank. This study is directed upon discovering whether or not the venturing into the trust function is beneficial for one type of thrift bank, which are savings and mortgage banks, by comparing the profitability of banks that engage in trust to those that do not offer trust services. The research will use a panel data spanning from 2004 to 2008 that will use the values of 26 banks. The study will use a simple linear regression in deriving the results for our research, using variables such as return on equity, net profit margin and a dummy variable that would classify whether the bank offers trust services or not. The results obtained from the tests suggest that there is no change in profitability in savings and mortgage banks that offer trust compared to those that not, and that trust income cannot be considered as an alternative source of income for the bank.