Australian custody and administration sector nears $2.5 trillion 

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David Braga,

David Braga,

The Australian custodial and administration sector grew strongly in the first half of 2014 to just under $2.5 trillion, according to data released yesterday by the Australian Custodial Services Association (ACSA).

The latest industry statistics from ACSA, the peak industry body for Australia’s custody and asset administration sector, reveal the total assets under custody for Australian investors grew 6.3 per cent to $2.459 trillion in the six months to 30 June 2014.

Australian custodians are the safe keepers for $1.7 trillion of Australian assets and $740 billion non-Australian assets for Australian investors.

There was also a steady increase in Australian assets held under custody for foreign clients (sub-custody), which increased 8.2 per cent to a new high of $1.037 trillion. There were marginal increases in Australian assets under custody (up 3.3%) and non-Australian assets under custody (up 14.5%) for Australian investors.

Mr David Braga, Chair of ACSA, said the latest statistics reflect the continued importance of the sector in the role it plays for financial services in Australia.

“In addition to the role as safe keepers of close to $2.5 trillion of assets, the past twelve months have seen additional demands for regulatory reporting that highlights the role of custodians as primary record keepers and providers of investment infrastructure,” Mr Braga said.

“The importance of the role our members play to control assets on behalf of investors will be emphasized in January 2015 with ASIC’s revised rules for custodians (RG133 Holding Assets). And then looking forward to 2016 the potential changes by the ASX to introduce T+2 settlement and new CHESS infrastructure,” Mr Braga concluded.

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 administers in Australia, reflecting asset shifts and major mandate wins and losses.

Major players hold their positions

NAB Asset Servicing remains the largest overall player in the custody market with $673 billion in total assets under custody for Australian investors (up 6.6% for the six months), followed by J.P. Morgan ($464 billion, up 10.5%), BNP Paribas ($312 billion, up 2.3%) and Citigroup ($257 billion, up 1.1%).

These four custodians collectively manage almost 70 per cent of assets under custody, with the remaining share of assets under custody held by State Street, Northern Trust, HSBC Bank, BNY Mellon, Bond Street, RBC Investor Services and Netwealth. J.P. Morgan remains the largest custodian of non-Australian assets for Australian investors ($232 billion, up 53.5%), followed by Citigroup ($107 billion, up 17.4%) and State Street ($106 billion, up 5.2%).

HSBC Bank retains its position as the major sub-custodian in Australia with $684 billion in sub-custody assets (up 10.3%), a figure that represents 66% of all Australian sub-custody assets.

Assets held under administration (not held in custody but administered by custodians) also increased 4.2%, with NAB Asset Servicing remaining the largest administrator in Australia with $447 billion in assets under administration.

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