Custody sector grows 6.4%

The total assets under custody in Australia grew by 6.4 per cent $3.2 trillion during the first half of 2017, according to the Australian Custodial Services Association (ACSA).

The latest ACSA statistics found the amount of overseas client investment into Australia, assets held in sub-custody arrangements, grew by 5.7 per cent over the first half of 2017. ACSA said this reflected the growing attractiveness of Australia as an investment destination for foreign asset owners.

J.P Morgan remained the largest overall provider in the Australian custody market for the third time running at $640.7 billion, followed by NAB Asset Servicing at $534 billion, and BNP Paribas at $510 billion.

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The largest increase in custody assets was Netwealth with a 31.2 per cent increase to $14.3 billion which ranked it at 10th.

ACSA chair, David Knights, said the increase in custody overall had been fuelled by a 7.1 per cent growth in domestic assets held for Australian investors, outpacing foreign investment growth which stood at five per cent.

“Growth in Australian settlement transaction volumes was up 8.1 per cent for the period, whilst unlisted unit trust registry transaction volumes declined by 14.5 per cent, possibly reflecting a shift into domestic listed asset classes,” Knights said.

“Looking forward for the sector, both the implementation of Attributed Managed Investment Trust Regime and the commencement of the Asian Funds Passport will drive foreign investment growth in the Australian market.”

ACSA found that HSBC remained the largest sub-custody services provider in the Australian market at $1.05 trillion, followed by J.P. Morgan at $187.82 billion, and Citigroup at $136.2 billion.

The largest decrease in this sector was NAB Asset Servicing with a 64.5 per cent decrease to $11 billon. 

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