HSBC Securities Services records 11% growth for 2018

Revenues for HSBC Securities Services grew 11% to nearly $2 billion over the year, in which it was boosted by its global custody business.

By Joe Parsons

HSBC’s securities services unit recorded double-digit revenue growth for 2018, marking an encouraging start for the franchise under its new co-leadership.

Revenues for HSBC Securities Services grew 11% to nearly $2 billion over the year, with net fee income from the global custody business up 6% to $736 million.

HSBC stated: “We grew average assets under management and average assets under custody from increased client mandates, growth in equity markets early in 2018, and higher interest rates.”

However, assets under custody over the year declined 4% to $7.4 trillion, and assets under administration also dropped 2% to $3.5 trillion over the year, similar to other global custodians that saw their assets fall over the year.

HSBC attributed the decline to “adverse foreign exchange movements in Europe and Asia, together with adverse market movements in Asia.” However, it said the numbers were partly offset by “incremental assets under custody in North America.”

The results are a welcome start for HSBC Securities Services’ new global co-heads, Allegra Berman and Richard Godfrey, who will both begin their first full year leading the franchise.

The two have since made a number of changes to the business’s regional leadership, including a new head of Europe, a new head of Asia-Pacific, and a new Americas buy-side sales executive.

The business has also restructured its innovation franchise, a division responsible for exploring partnerships with FinTechs and researching the use of new technologies.

HSBC’s performance resembles that of BNP Paribas Securities Services, which recorded a revenue increase of 10% in the business at nearly €2.2 billion, though assets under custody fell 1.3% to €9.3 trillion as a global sell-off in equity markets hit Europe.