List of modern operations of the bank constantlyupdated. Today, factoring and leasing, which are popular today, can go into the background. They complement and expand the activities of the bank. Therefore, they are often called non-traditional. They also include trust banking.
It is very important to separate the concepts of banking"operations" and "services." The latter do not form any resources, do not increase liabilities, bank requirements, do not contain risks, incomes from them are included in GDP in full. In such transactions, the bank acts as an intermediary between the client and other financial institutions.
The prerequisite for the appearance of specific operationsis competition in a separate segment and in the money market in general. The volume of such transactions for a particular bank depends on the level of development of the credit institution.
Trust operations are management transactionsproperty of the customer, performance of services on his behalf as a trustee. Their essence lies in the fact that the client transfers his property (without the right of ownership) to the credit institution in order to obtain profit as a result of investing assets in various markets. With these revenues, the bank receives part of the profits in the form of a commission.
The concept of "trust" in English means "trust". Operations performed by the bank require full trust in the institution.
Parties to the transaction
The subjects of the transaction are:
- The founder is an enterprise or an individual who transfers the property to the bank.
- The manager is a credit institution that carries out this type of activity on the basis of a license.
- In favor of the beneficiary is the contract itself.
The object of the transaction may be property orproperty rights, which belong to the founder on the rights of ownership. Full-manager trust operations of a commercial bank are transactions in which the manager acts independently within his authority. There are also transactions that must be previously agreed with the principal.
Unlike other operations, trust transactions:
- are carried out without use of own means;
- give the opportunity to manage the CB without great risk:the bank will be able to receive commissions even under unfavorable market conditions; does not bear responsibility for losses incurred in such situations.
Trust trust operations are availablepractically to all banks. There is no need to open a new department for transactions. Some of these transactions banks have performed before, but they were called differently. Trust operations include services for:
- storage of values;
- receipt of funds by proxy;
- disposal of the property of the owner after his death, etc.
Trust bank transactions - transactions betweena credit institution and a client in which the bank takes obligations to dispose of the property in favor of a third party. It is advantageous for the client to transfer property management functions and to receive the maximum revenue from such transactions. At the same time, he remains a full-fledged owner, and the bank gets the authority to dispose of property for a certain period of time.
- Personal: provided to individual citizens.
- Institutional: are provided on the basis of an agreement between the mortgagor and the manager of obligations or between the owner and the trust company.
- Master-Trust: it turns out to be a PF or AMC bank by managing a common account in order to obtain the maximum income.
Types of trust operations that are providedindividual citizens, are conditionally divided into irrevocable and revocable. The first group includes transactions for which the principal can not terminate the contract, and to the second, respectively, transactions that can be stopped at any time.
The property, which is listed in the activemanagement, it is possible to resell, transfer in a debt, to pledge. Such transactions are more typical of banks. Passive trust operations are property management services that can not be resold or mortgaged. Such operations are provided by firms that provide consulting services.
Credit institutions perform such trust operations:
- keeping personal accounts;
- management of the Central Bank for the purpose of sale or exchange;
- provision of depository services;
- temporary management of the company for the period of its reorganization;
- collection of income in favor of the client.
For such transactions, banks:
- keep money, the Central Bank and other valuables;
- prepare accounting documents;
- receive payments by proxy;
- carry out transactions of purchase and sale of securities, perform settlements and provide consulting services for the selection of the optimal portfolio of securities;
- provide guarantees and sureties.
A credit institution takes on certainobligations. If some operations were unprofitable due to his fault, then the bank should compensate the client for lost profits. Specific actions are prescribed in the contract. The bank establishes conditions for funds management. The amount of income is paid to the trustee during the whole term of the contract.
Transactions are made on the basis of a trust or agency agreement. It states that the bank acts on behalf of the principal in a limited number of issues.
In world practice operations are carried outdifferently. If in the country the legal system is built according to the Anglo-Saxon scheme, then the property right is distributed between the founder and the manager. If a romano-German (continental) scheme operates, then, like in Russia, the trustee does not receive title to property.
Trust operations are transactions thatare carried out with highly liquid assets. This is one of the complex types of banking services. The degree of its implementation depends on the market economy and on the experience of a particular bank in this direction. The credit institution is responsible for losses, possible errors, non-observance of the terms of the contract, negligent management of the values, inaccurate implementation of instructions. For this reason, in some countries there is a rule of "a sensible person". Evaluation of trust operations is carried out in the same way as their own.
The bank charges a fee for the implementation of such services. Its size is prescribed in the agreement and depends on the type of transaction. The amount of remuneration for managing the inheritance is determined by law or by a court decision. The commission for the execution of agency operations includes annual deductions from income and contributions of part of the principal amount upon the completion of the contract. If the bank resorted to the help of intermediaries, for example, brokers, the amount of remuneration received should include a commission intermediary.
Examples of trust operations
The market is popular with new typesservices, such as temporary management of the company's affairs in the event of its reorganization, management of the charitable foundation. The most difficult are depository services for storing securities, their disposal and investing in certain assets. Such trust operations of the Savings Bank can be carried out only with the help of intermediaries: brokers, stock exchanges, investment companies. All these financial institutions act as agents between the principal and the RZB.
There are also transactions when the corporation actsissuer, and the bank - in the role of a dealer: it buys shares of the company for the purpose of selling them (underwriting). These are the most profitable and popular deals. For their implementation, you need an impeccable reputation, high demand for the Central Bank, and the bank's participation in the stock exchange.
Management of an investment portfolio is stillone example of a trust operation. Important moments in the conclusion of such transactions are the duration of the contract, the degree of control of the bank by the Central Bank of the corporation, its impact on managing affairs and making a profit. Such transactions require substantial preparation, but at the same time are an important source of income.
To ensure the confidentiality of clients' interests, the bank can:
- to close access to the bank's employees in the network of departments that are engaged in trust management and agency transactions in the stock market;
- subordinate trust units to the bank's management system;
- isolate the trust department from the main office;
- formalize a written commitment of employees to non-disclosure of information.
Trust Operations in the Russian Federation
To increase the demand for conducting trust management operations in Russia, it is necessary:
- to improve the mechanism of transactions, the technique of interaction of the participants of the RCB with banks;
- Develop the process of concluding a deal in the bank;
- carry out work among potential customers;
- make changes to the regulatory framework.
Let us dwell in more detail on the last point. The Bank of Russia together with the Association for the Protection of Information Rights of Investors (AZIPI) signed an agreement providing for the disclosure of data on the activities of banks in the financial market through the publication of general fund balances. If the information is hidden partially or completely, the Central Bank may impose sanctions on a particular bank.
Trust operations are a promisingthe direction of the development of the bank, as they bring more income in comparison with other options for the allocation of free assets and enable credit institutions to compete with professional participants of the RZB. Banks in the West usually allocate such units to branches. If credit institutions implement an individual approach to each client, then there is no separation of trust services from classical ones.