Chilean pension fund manager AFP Bansander is aiming to become the country's largest player in the voluntary pension plan business (APV) in the this year's third quarter, company marketing and APV CEO Pablo Sprenger told BNamericas.
AFP Bansander's original plan was to become the country's largest player in the segment by year-end but faster-than-expected growth has set the local unit of Spain's Grupo Santander (NYSE: STD) to reach a 23% market share by July or August, he said.
Chilean authorities introduced APV plans in 2002 for people seeking to save extra money on top of their mandatory pension accounts. So far though the APV system has mostly benefited high-income earners, who enjoy tax breaks deriving from APV contributions.
The APV industry has become the fastest-growing financial market in Chile, with funds under management rising 36.8% last year to 994bn pesos (US$1.91bn) compared to 2004, according to official figures.
Sprenger expects this figure to reach 1.4tn pesos by end-2006, with AFP Bansander doubling assets to 320bn pesos.
"We aim to increase APV sales at a retail level, more than doubling our APV customers to 100,000 by year-end 2007. Today APVs are very much concentrated in the higher-income segment of the population. APVs have become the favorite savings product for Chilean executives," he said.
In Chile, the Spanish giant sells APV plans mainly through AFP Bansander but also through its mutual funds and insurance units.
The APV industry is dominated by the AFP pension fund managers with 76% of total funds under management. Mutual funds rank second, followed by insurance companies.
The total number of APV accounts in Chile rose 9% to 432,731 in 2005.