A rally in equity markets during the second half of 2012 has grown total assets under custody for Australian investors by 8.7 per cent to $2.03 trillion, the Australian Custodial Services Association (ACSA) said.
Assets increased to $2.03 trillion for the second half of the year to 31 December 2012, with growth in non-Australian assets under custody (14.5 per cent) outstripping growth in Australian assets under custody (6.7 per cent) for Australian investors.
ACSA said the 13.5 per cent growth in Australian assets under custody for foreign investors indicated a strong rebound in local markets and global demand for custody and administration services.
Citigroup and State Street experienced huge growth over the six months due to operational in-sourcing and client acquisitions. Citi increased assets by 40.5 per cent to $177 billion and State Street grew its assets under custody by 56.1 per cent to $171 billion.
But NAB Asset Servicing remains the largest overall player in the custody market, increasing its assets by 1.0 per cent to $554 billion for the six months, followed by JP Morgan which increased assets by 11.8 per cent to $376 billion.
BNP Paribas reported a 6.6 per cent decline in assets under custody to $296 billion.
HSBC Bank is still the dominant sub-custodian according to ACSA, with $571 billion in sub-custody assets.
Low cash rates saw investors move from cash and fixed income to equity markets, and led to a 10.5 per cent decline in assets under administration.
NAB Asset Servicing is the largest player in the Australian market, with $379 billion in assets under administration, followed by BNP Paribas ($357 billion) and State Street ($182 billion).
ACSA chair Pierre Jond said the custody and administration sector was experiencing renewed confidence from institutional clients including asset managers, insurance groups and superannuation funds.
He said data and industry sentiment was for growth in the industry in 2013 rather than a temporary rebound.
