What is Corporate Trust in Banking?

A corporate trust in banking involves a financial institution, such as a bank or a trust company, acting as a trustee on behalf of investors, corporations, and other entities. These institutions manage assets, supervise trust administration, and handle investment portfolios, ensuring compliance with trust agreements and regulations. One Pacific Trust provides professional trust services, managing everything from corporate pension supervision to complex finance vehicles like asset-backed securities, adding a layer of security and protecting the interests of all parties involved.

A corporate trust section of a bank has direct responsibility to ensure that the trusts are properly managed in accordance with the stipulations of a trust agreement and, where appropriate, under applicable law and regulations. Those include proper safekeeping of the assets, management of investments, attention to tax and other obligations, and distribution of the income to the respective beneficiaries.

Corporate trusts can be used for just about almost all structured finance vehicles, from the simplest to the most complex, such as asset-backed securities and mortgage-backed securities. The bank, as trustee, adds another layer of security and creates a fiduciary relationship that would seek to protect the interests of all concerned parties.