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No one is leaving the custody party
National Australia Bank may have considered selling its NAB Asset Servicing business but no one is expecting anyone to leave the sector any time soon.
Around two years’ ago National Australia Bank (NAB) signalled that it might be ready to exit it’s custody business NAB Asset Servicing. Today it has no such intentions and the latest Australian Custodial Services Association (ACSA) shows it as the largest player in the local market.
According to the ACSA data, released in late March, NAB Asset Servicing remained the largest overall provider in the custody market followed by JP Morgan, BNP Paribas, Citigroup, and Northern Trust.
And NAB’s decision not to sell is possibly justified by the fact that despite superannuation fund mergers and other forms of consolidation, the Australian custodial and administration sector grew by 4.9 per cent in the second half of 2015, with total assets under custody (AUC) for Australian investors standing at more than $2.9 trillion.
Commenting on the current shape of the market, BNP Paribas Securities Services head, David Braga suggested that it would be wrong to suggest any of the major players would be looking to exit the market any time soon.
“The Australian market will always be competitive for our type of services,” he said.
“It’s an attractive market legitimately dominated by global players because of the scale they are able to bring into the market.”
However, he noted that it was good for Australians buyers to be able to access some local capability and to access it at the right price point.
“It’s hard to see anyone proactively choosing to stop participating,” Braga said.
“In this business you can always put the case that ‘we’re nearly there’. So we won’t be seeing anyone stepping out any time soon.”
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