The results of the Global Custodian 23rd annual Agent Banks in Major Markets Survey are released today. This year BNP Paribas Madrid set a record in the survey by collecting its 20th consecutive Top Rating. And in another first of the survey, Euroclear outscored rival ICSD Clearstream, pulling ahead for the Leading Client category. Clearstream, however, still retained its lead for cross-border clients as whole. In all the survey covered 49 separate service providers in 26 markets and as ICSDs, based on 3,961 authenticated responses.
Since its inception, the survey has sought to measure client perceptions regarding the quality of the clearing and settlement and asset-servicing duties of their agent banks. Results are measured across three client segments: Leading, Cross-Border/Non-Affiliated (CB/NA) and Domestic.
A summary of rated providers and the Best in Class (BIC) awards that they earned is listed below in Tables 1 & 2. To illustrate the changes in provider ratings since last year, we have used a color coding system where green indicates upward movement in a rating and red indicates a downward movement; blue indicates that a provider achieved a rating in a category it did not qualify for the previous year. Additionally, for reference, we have included a list of Top Rated providers from last year.
Table 1: Rated Providers According to Market and Number of BIC Awards Received
| Market 2011 | Leading Top Rated  | Leading Commended  | Leading  / | CB/NA Top Rated  | CB/NA Commended  | CB/NA / | Domestic Top Rated  | Domestic Commended  | Domestic / |
| Australia | Citi (10), NAB (6), HSBC (8) | J.P. Morgan (2) | | Citi (11), HSBC (11), NAB (9) | J.P. Morgan (3) | | HSBC (7), Citi (8) | NAB (4), J.P. Morgan | |
| Austria | Erste Bank (12) | Deutsche Bank (10), UniCredit (3), RBI (5), Citi | | BNP Paribas (12) | Deutsche Bank (10), Erste Bank (4), RBI (4), UniCredit (1), Citi | | Erste Bank (12) | | |
| Belgium | Citi (8), KBC (6) | BNP Paribas (1) | ABN AMRO | Deutsche Bank (12), KBC (9), Citi (8) | BNP Paribas (2) | ABN AMRO | | KBC (7) | |
| Canada | | CIBC Mellon (6), RBC (2), Citi | | CIBC Mellon (12) | Citi (3), RBC | | RBC (12), CIBC Mellon (11) | | |
| Denmark | Nordea Bank (11), SEB (6) | Danske Bank (4) | | | Nordea Bank (7), SEB (4), Danske Bank (2) | Handelsbanken | | | |
| Finland | Nordea Bank (12) | SEB (6) | | | Nordea Bank (4), SEB (4), Handelsbanken | | | | |
| France | BNP Paribas (6), Citi (9) | | CACEIS | Citi (10), Deutsche Bank (11) | CACEIS (5), BNP Paribas (7) | | CACEIS (12) | | |
| Germany | BNP Paribas (10), Deutsche Bank (9) | Citi | | CACEIS (12), Citi (12), BNP Paribas (10), Deutsche Bank (10) | HSBC, BNY Mellon | Commerzbank | BNP Paribas (8) | HSBC (12), CACEIS (7), Deutsche Bank | |
| Greece | Citi (10), BNP Paribas (12), Eurobank EFG (5) | HSBC (9) | NBG | SGSS (11), NBG (11), HSBC (11), Citi (10), BNP Paribas (11), Eurobank EFG (7) | | | NBG (12), HSBC (11), SGSS (11), Eurobank EFG (1) | | |
| Hong Kong | HSBC (11) | Citi (8), SCB (3) | | Citi (13), HSBC (13), SCB (12) | BNP Paribas (8), Deutsche Bank (9) | | SCB (12) | Deutsche Bank (6), Citi | |
| Ireland | Citi (6) | | Northern Trust | BNP Paribas (12), Citi (10) | | Northern Trust | | | |
| Israel | | Citi (7), Bank Leumi (3) | Bank Hapoalim | | Bank Leumi (3), Citi (4), Bank Hapoalim | | | | |
| Italy | Citi (8), BNP Paribas (7) | SGSS | Deutsche Bank,
Intesa Sanpaolo | Citi (10), Deutsche Bank (7), SGSS (6) | BNP Paribas (6), Banca Intesa | | BNP Paribas (12), Deutsche Bank (10), SGSS (10) | | |
| Japan | Mizuho (12), HSBC (11), Citi (10), SMBC (8), BTMU (5) | SCB | | Mizuho (13), HSBC (13), Citi (12), SMBC (13), BTMU (6) | SCB | | SMBC (12) | | |
| Korea | HSBC (11), Citi (11), SCB (7) | | | Citi (13), HSBC (9), SCB (7) | | Deutsche Bank ,
HANA Bank | Kookmin Bank (12), HSBC (12), Citi (11), SCB (9) | | |
| Netherlands | Citi (8) | BNP Paribas, ABN AMRO (3) | | Deutsche Bank (13), Citi (10) | BNP Paribas (5), ABN AMRO | KAS Bank | | | |
| New Zealand | Citi (8), HSBC (8) | J.P. Morgan (4) | NAB | HSBC (10), NAB (9), Citi (8) | J.P. Morgan (2) | | | | |
| Norway | Nordea Bank (11), DnB (9), SEB (5) | | | DnB (8) | Nordea Bank (5), SEB (2), Handelsbanken | | | | |
| Portugal | Millennium bcp (9) | BNP Paribas (3), Santander (8), Citi (4), BES (3), | | Deutsche Bank (12), Citi (9), Millennium bcp (10), | BNP Paribas (3), Santander (2), BES (1) | | BES (9) | Santander | Milennium bcp |
| Singapore | HSBC (9) | SCB (1), Citi | | SCB (13), Citi (13), HSBC (10), DBS Bank (6) | BNP Paribas (11), Deutsche Bank (5) | | SCB (12) | DBS Bank (6), Citi (7), UOB (5), Deutsche Bank (2) | |
| South Africa | FNB International (7) | Standard Bank (1) | | | FNB International (3), Standard Bank (1), | Citi | SGSS (10) | Nedbank, Standard Bank (1) | Absa |
| Spain | BNP Paribas (10), Citi (6) | BBVA (7), Santander (6), Deutsche Bank (4) | | BBVA (11), BNP Paribas (9), Citi (8) | Santander (6), Deutsche Bank (3) | | BNP Paribas (12), RBC (10), BBVA (7), Deutsche Bank (6) | Santander | |
| Sweden | SEB (8) | | | SEB (6) | Handelsbanken (6), Nordea Bank (5) | | | | |
| Switzerland | BNP Paribas (11), UBS (7), Credit Suisse (3) | | Citi,
SIX SIS | BNP Paribas (12) | UBS (6), Credit Suisse (2), SIX SIS (3), Citi | | | SIX SIS | |
| United Kingdom | Citi (9) | HSBC (7), BNP Paribas (6) | BNY Mellon ,
J.P Morgan | BNP Paribas (12), Citi (13) | HSBC (6) | BNY Mellon ,
J.P Morgan ,
KAS Bank | | | |
| United States | BBH (11) | BNY Mellon (2) | Citi,
J.P Morgan | BBH (9) | Citi (6), BNY Mellon (2) | J.P Morgan | | | |
| ICSD | Euroclear (9) | Clearstream (6) | | Clearstream (13), Euroclear (11) | SIX SIS (5) | | | | |
Table 2: Rated Providers According to Region
| Region | Leading Top Rated | Leading Commended | CB/NA Top Rated | CB/NA Commended |
Asia/Australasia | Citi, HSBC | | Citi, HSBC | |
Nordics | Nordea, SEB | Handelsbanken | | Handelsbanken, Nordea, SEB |
North America | | Citi | | Citi |
Western Europe | Citi, Deutsche Bank, BNP Paribas | | Citi, Deutsche Bank, BNP Paribas | |
Global | Citi | | Citi | |
Table 3: The Leading Providers in Each Market in 2011
| Market | Leading Top Rated Company | CB/NA Top Rated Company |
| Australia | Citi, NAB, HSBC | Citi, HSBC, NAB |
| Austria | Erste Bank | BNP Paribas |
| Belgium | Citi, KBC | Deutsche Bank, KBC, Citi |
| Canada | | CIBC Mellon |
| Denmark | Nordea Bank, SEB | |
| Finland | Nordea Bank | |
| France | Citi, BNP Paribas | Citi, Deutsche Bank |
| Germany | BNP Paribas, Deutsche Bank | CACEIS, Citi, BNP Paribas, Deutsche Bank |
| Greece | Citi, BNP Paribas, Eurobank EFG | SGSS, NBG, HSBC, Citi, BNP Paribas, Eurobank EFG |
| Hong Kong | HSBC | Citi, HSBC, SCB |
| Ireland | | |
| Israel | Citi | BNP Paribas, Citi |
| Italy | Citi, BNP Paribas | Citi, Deutsche Bank, SGSS |
| Japan | Mizuho, HSBC, Citi, SMBC, BTMU | Mizuho, HSBC, Citi, SMBC, BTMU |
| Korea | HSBC, Citi, SCB | Citi, HSBC, SCB |
| Netherlands | Citi | Deutsche Bank, Citi |
| New Zealand | Citi, HSBC | HSBC, NAB, Citi |
| Norway | Nordea Bank, DnB, SEB | DnB |
| Portugal | Millennium bcp | Deutsche Bank, Citi, Millennium bcp |
| Singapore | HSBC | SCB, Citi, HSBC, DBS Bank |
| South Africa | FNB International | |
| Spain | BNP Paribas, Citi | BBVA, BNP Paribas, Citi |
| Sweden | SEB | SEB |
| Switzerland | BNP Paribas, UBS, Credit Suisse | BNP Paribas |
| United Kingdom | Citi | BNP Paribas, Citi |
| United States | BBH | BBH |
| ICSD | Euroclear | Clearstream, Euroclear |
The full results of the Agent Banks in Major Markets Survey, and a full explanatory methodology, can be accessed by subscribers here.
Methodology and Rating System
In the past two years, we have overhauled both our survey methodology and questionnaire; some of those changes have been retained this year, while others have not. Our goal has always been to maintain the integrity and accuracy of our results but also to provide information that is valuable to our readers, respondents and service providers, and reduce the burden of participation on the latter two, who devote their time and effort in no small measure. As a matter of practice we put out an open solicitation for thoughts and suggestions before the start and after the conclusion of every survey. Based on the feedback we received last year, we focused on revising the survey to better address the needs of our respondents. We are very grateful to those who took the time to meet and discuss with us in-depth their thoughts regarding the process filling in the survey questionnaire as well as the usefulness of the data collected and its presentation.
The questionnaire for domestic clients consisted of 85 rating questions, while the CB/NA-Leading client version consisted of 87 rating questions. Both questionnaires are divided into the following 12 service areas: Value and Commitment; Client Service; Relationship Management; Reporting; Corporate Actions; Cash Management; Foreign Exchange; Financing; Income Collection; Settlement; Account Administration; and Technology and Connectivity. Tax Reclaims appeared in the CB/NA-Leading questionnaire only. Changes made to both questionnaires this year included removing a large number of non-rating questions (39 in total for both questionnaires) in order to shorten their length. To help speed up the process of filling in the questionnaire, respondents were also given a simplified method to opt out of filling in each service area. Additionally, we removed and separated several service areas, adding and removing a number of new questions in the process. A summary can be found in Box 1. Furthermore, we replaced our Comments sections with more pointed questions in order to draw out more detailed and illuminating responses. Other minor changes included the rephrasing and re-sequencing of a small number of questions, as well.
We have also chosen to retain other changes in the methodology, introduced last year and designed to protect the integrity of the survey results. First, we have excluded outlying scores from the calculation of the three global benchmark scores. We define outlying scores as any response where the respondent has assigned scores of either 1 on every question or scores of 7 on every question.
Furthermore, we have replaced all unanswered questionsthat is to say, all questions to which a respondent answered Not Applicable or left blankin the CB/NA and Domestic client categories with the global average score for that category, averaged over the past five years of surveys, as adjusted for distorting factors in those years. In calculating the scores awarded to particular providers, we have retained the replacement scores. We believe this change addresses a long-standing methodological problem in the survey, by which results were distorted at the service area level and overall through exceptionally high or low scores based on a limited number of responses. The average adjusted scores used this year are 5.37 for CB/NA responses and 5.71 for Domestic responses versus 5.35 and 5.70, respectively, last year.
The CB/NA category is made up of a collection of broker-dealers, fund managers, investment banks and other assorted organizations that are based in a jurisdiction other than the agent bank that they are rating and are not affiliated with their agent by ownership, joint venture or business alliance. Their scores make up the segment from which the CB/NA ratings are derived.
The Domestic client segment consists of third-party clients based in the same market as the agent bank that they are rating and from which they buy services in that market, as opposed to foreign markets. These clients make up the respondents from which the Domestic ratings are derived. Unlike CB/NA respondents, these respondents can be affiliated with the agent bank they are rating. Leading client ratings are considered on a market-by-market basis.
Leading Clients are a select group of 130 CB/NA respondents to the survey. They are chosen based on a number of combined criteria including their use of multiple providers, reliable participation in the survey and that they are widely recognized as larger and more experienced and knowledgeable than the generality of respondents. We regard the scores from these clients as the gold standard in service provision, since they are earned from the most sophisticated and knowledgeable clients, familiar with multiple providers.
To secure a CB/NA rating, an agent bank must secure a minimum of 15 responses in all markets in the survey, except Greece, Ireland, Portugal and South Africa, which were set at ten. A Domestic rating is open to any agent bank that secures at least five to ten responses, depending on the market. We received a total of 4,986 responses overall. After filtering for errors, duplicates, incomplete responses and attempts to manipulate the outcome of the survey, the total number of responses used to derive the resulting ratings was 3,961. This compares with the 3,857 authenticated responses received in the same survey in 2011. Of this total, 3,136 qualified as CB/NA, 667 as Domestic and 1,669 as Leading client responses. Reponses from affiliated organizations are not counted toward a rating.
In all three client categories, agent banks are eligible for either Top Rated or Commended status. Top Ratings are awarded to any bank whose overall weighted average score equals or betters the global weighted average (i.e., the weighted average of all scores given to all agent banks participating in the survey). Commended ratings are a more subjective category that takes into account factors other than scores alone. If a provider has sufficient responses to be rated, but scores are poor, it is marked Unrated 
. Providers who did not attract enough responses to be rated are marked Not Rated . It is a long-standing rule of the survey that no provider can fall or rise by more than one rating category a year, making it impossible to rise from Not Rated or Unrated to Top Rated in a single year, or to fall from Top Rated to Unrated or Not Rated in a single year.
Additionally, providers are eligible for Best in Class awards in each of the service areas in the survey questionnaire (13 for CB/NA, 12 for Domestic; see Table 1 for a list of service areas). These go to any provider that achieves an overall weighted average score that equals or betters the global weighted average score in that service area (i.e., the weighted average of all scores given to all agent banks participating in the survey in that service area).
In addition to ratings in individual markets, providers are also eligible for Multi-Market ratings, designed to take account of the trend of the purchasing of packages of markets from a single supplier. Regional Multi-Market ratings are available in four regions (Asia/Australasia, Nordics, Western Europe and North America) and, since packages of markets are not bought on a regional basis only, on a Global basis as well. These are by definition available on the basis of CB/NA responses only.
To secure a Regional Multi-Market rating, providers must secure enough CB/NA responses and scores of ratable standard from respondents who specified that they were buying a multi-market service in every market in Asia/Australasia, the Nordics and North America and in at least six markets in Western Europe.
Respondents were asked to rate the quality of service from their providers on a scale of 1 to 7, where 7 is excellent; 6, very good; 5, good; 4, satisfactory; 3, weak; 2, very weak; and 1, unacceptable. Scores are weighted both for questions named by respondents as important and for the size of the respondent.
Contacts:
Dominic Hobson, Editor in Chief, at dhobson@globalcustodian.com
Allison Cayse, Surveys Editor, at acayse@globalcustodian.com
Muzaffar Karabaev, Survey Reprints/Research Enquiries, at mkarabaev@globalcustodian.com