Australian custody and administration sector continues growth trajectory

Australian admin and custody sector continues to grow.

Australian admin and custody sector continues to grow.

The Australian custodial and administration sector continues to grow strongly driven by rising equity markets, with the latest industry statistics released by the Australian Custodial Services Association (ACSA) revealing total assets under custody for Australian investors grew by 8.3% to $2.32 trillion in the six months to 31 December 2013.

The research from ACSA, the peak industry body for Australia’s custody and asset administration sector, shows growth of both Australian assets under custody (up 8.4%) and non-Australian assets under custody (up 7.4%). Australian assets under custody for foreign investors (sub-custody) grew by 3.8%.

In total, custodians in Australia are the safe keepers for $1.67 trillion of Australian assets and $647 million non-Australian assets for Australian investors. Custodians also hold $959 million of Australian assets for foreign investors (sub-custody).

Mr David Braga, Chair of ACSA, said the latest statistics demonstrate the financial sector’s stability and expects the custody sector to continue growing strongly in 2014.

“The latest industry statistics show steady growth in the custody and administration community, reflecting the health of Australia’s growing wealth management, superannuation and investment sector,” Mr Braga said. “The data demonstrates stability of the broader sector, and the expectations from the custody industry are that we will see similar levels of steady growth throughout the coming year,” he said.

Published twice a year, the industry statistics give an insight into settlement transaction volumes and provide a league table of major custody, sub-custody and asset administrators in Australia, recording major mandate wins and losses.

Major players hold their positions

Local custodian NAB Asset Servicing remains the largest overall player in the custody market with $632 billion in total assets under custody for Australian investors (up 11.4% for the six months), followed by J.P. Morgan ($420 billion, up 6.4%), BNP Paribas ($305 billion, down 2.6%) and Citigroup ($255 billion, up 19.4%).

They are followed by State Street, Northern Trust, HSBC Bank, BNY Mellon, Bond Street, RBC Investor Services, Ausmaq and Netwealth, who collectively manage 30% of assets under custody.

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 ($151 billion, up 10.5%), followed by State Street ($101 billion, up 15.5%) and NAB Asset Servicing ($92 billion, up 6.9%).

With an increase of 7.4% over the six month period, HSBC Bank consolidates its position as dominant sub-custodian in Australia with $620 billion in sub-custody assets, a figure that represents 64% of all Australian sub-custody assets.

Assets held under administration (not held in custody but administered by custodians) grew 6.2%. NAB Asset Servicing remains the largest administrator in Australia with $425 billion in assets under administration, followed by BNP Paribas ($381 billion) and State Street ($237 billion).

Click here for a full copy of the statistics.

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