The Australian Custodial Services Association (ACSA) today revealed that total assets under custody for Australian investors grew by 8.7% to $2.03 trillion for the second half of the year to 31 December 2012, driven by enlivened equity markets.
The research from ACSA – the peak industry body for Australia’s custody and asset administration sector – showed stronger growth in non-Australian assets under custody (14.5%) compared to Australian assets under custody (6.7%) for Australian investors.
Australian assets under custody for foreign investors (sub-custody) also grew by 13.5% indicating a strong rebound in local markets and global demand for custody and administration services.
Published biannually, the industry statistics show the size of assets under custody and administration in Australia – largely reflecting Australia’s growing superannuation and institutional investment base. As well as providing insights into settlement transaction volumes, the statistics are a league table of major custody, sub-custody and asset administers in Australia, recording major mandate wins and losses.
Mr Pierre Jond, Chair of ACSA, said players in the custody and asset administration space were seeing renewed confidence from their institutional clients such as asset managers, insurance groups and superannuation funds.
“The latest ACSA statistics show positive broader market sentiment and strong growth across the board in the custody and administration community,” Mr Jond said. “The current data and industry feeling is that we will see sustained growth in 2013 rather than a temporary rebound,” he said.
Key players
Local player NAB Asset Servicing remains the largest overall player in the custody market with $554 billion in total assets under custody for Australian investors (up 1.0% for the six months), followed by J.P. Morgan ($376 billion, up 11.8%), BNP Paribas ($296 billion, down 6.6%). Both Citigroup ($177 billion) and State Street ($171 billion) saw significant growth of their total assets under custody of 40.5% and 56.1%, driven by operational insourcing and client acquisitions.
Total local assets held under custody increased by 6.7% over the past six months with NAB Asset Servicing, J.P. Morgan and BNP Paribas the leading holders of Australian assets under custody.
J.P. Morgan remains the largest custodian of non-Australian assets for Australian investors ($109 billion, up 13.6%), followed by Northern Trust ($86 billion, up 7.0%) and State Street ($85 billion, up 150.3%).
HSBC Bank remains the dominant sub-custodian in Australia with $571 billion in sub-custody assets.
Assets held under administration (not held in custody but administered by custodians) were down 10.5%, as low cash rates drive investors to move cash and fixed income assets into equity markets. NAB Asset Servicing remains the largest administrator in Australia with $379 billion in assets under administration, followed by BNP Paribas ($357 billion) and State Street ($182 billion).