Assets under custody grows amid tough competition

Total assets under custody for Australian investors grew by 1 per cent to $1.82 trillion in the six months to 31 December 2011, according to the Australian Custodial Services Association (ACSA).

ACSA chair Pierre Jond said the growth came despite fierce competition from institutional clients such as asset managers, insurance groups and superannuation funds that were looking to offer their members a wider range of services.

"More than ever, custodians face the twin pressures of continual innovation and investment in technology while remaining highly cost-competitive," said Jond.

Australia is a very innovative market, and superannuation funds are "regularly pioneering investment in new products", he added.

NAB Asset Servicing has remained the largest overall player in the custody market, with $556 billion in total assets under custody for Australian investors - down 2.9 per cent for the six months to 31 December 2011.

NAB was followed by JP Morgan ($341 billion), BNP Paribas ($261 billion) and State Street ($125 billion).

HSBC Bank remains the largest sub-custodian in Australia, with $494 billion in sub-custody assets.

Assets under administration (ie, not held in custody) for Australian investors rose 16 per cent in the second half of 2012.

State Street is the largest administrator in Australia, with $56.3 billion in assets under management, followed by NAB Asset Servicing ($40.8 billion), Northern Trust ($37 billion), and BNP Paribas ($36.9 billion).