BNP Paribas Securities Services
At some point, you have to stop using the phrase ‘punching above its weight’ to describe BNP Paribas’ global custody business, as this offering continues to flourish at an international level.
The product of CEO, Patrick Colle’s, vision to build a truly global presence, the BNP Paribas Securities Services’ business is making waves throughout the global asset servicing industry, picking up new mandates aplenty and expanding its footprint throughout the world.
BNP Paribas’ ambitious expansion into the US to challenge the incumbent providers in a sticky market continues to look like a positive move, as it reaped the rewards through a global custody deal with US Bank, representing over $10 billion in assets. The deal will see BNP Paribas provide Minneapolis-based US Bank with global custody services in Austria, Belgium, Cyprus, France, Germany, Greece, Italy, the Netherlands, Portugal, Spain and Switzerland.
Colle explained to Global Custodian earlier this year that the deal was a testament to the bank having both a global and local expertise in the respective locations.
Elsewhere over the past 12 months, BNP Paribas has inked global custody deals in Australia, China Merchant Bank and Europe. In September, BNP Paribas it secured one of its largest custody deals in the Latin America region, winning a global custody mandate from Colombian pension fund Protección S.A and its $7.5 billion of foreign portfolio assets.
The French-headquartered bank is one of the pioneers of the industry when it comes to innovation and digital transformation, while also taking a lead in responsible investing.
Total AUC/A for the third quarter of the year has reached over €13 trillion for BNP Paribas, up 10.2% in comparison to the previous year. Meanwhile revenues for securities services increased 6.4% to €535 million.
While the very top tier of the global custody industry experienced a run of mostly faltering results throughout 2019, Citi has bucked this trend after reporting solid figures in its securities services business.
Revenues for the business up until the end of the third quarter reached nearly $2 billion, and while the results were flat of the year, revenues among the other big three global custodians dropped 5% on average. Citi had also increased its assets under custody to $21.7 trillion.
This has been down to increased volumes and mandates from new and existing clients, Citi previously stated, as well as a sustained push in Europe and Asia.
The custodian began the year with a mandate from fund administrator Apex Group to provide custody services to its global client base representing $560 billion in assets. Citi then won a custody mandate from Pacific Asset Management (PAM) and its Dublin-registered UCITS funds, and in October, was chosen by Victory Capital to provide custody and fund administration services for 53 mutual and exchange traded funds (ETF) representing $80 billion in assets.
Citi has also placed significant emphasis on providing ETF custody services, where it went live with custody and fund services for EMEA-domiciled ETFs powered by the bank’s Advanced Citi ETF System (ACES).
The custody industry is at a stage where if you are standing still, you’re going backwards. This is evidently a view shared by Northern Trust which has been actively moving forward with technology innovations and upgrades across its custody business.
Whether its machine learning, blockchain or integrated front-office and data services into its offering, Northern Trust has had a busy year. Rollouts have included a new asset servicing technology architecture to enhance data processing, the integration of its middle-office technology with front-office trading platforms, and machine learning for securities lending.
Subsequently these moves have been resonating with clients, and resulted in a 7% uptick in assets under custody this year, along with a consistent rise in asset servicing revenues.
The Chicago-headquartered custodian’s big deals of the year have included being selected by Introspect Capital, a boutique Middle East-based asset manager, and the Government of South Australia in a $24 billion mandate. One of its other significant mandates included the renewal of its long-standing relationship with Pzena Investment Management, the $37.4 billion assets manager.
Global custody deals were also signed with The World Bank Treasury, Chawton Global Investors and Canada’s Knowledge First Financial.