JP Morgan boss lauds improved custody business

Revenues for JP Morgan's securities services business hit over $1 billion for the second consecutive quarter.
By Joe Parsons

JP Morgan’s chief executive Jamie Dimon has praised the bank’s custody and securities services business after it reached $1 billion in revenues for the second consecutive quarter.

Revenues for the securities services unit increased 14% year-on-year, while its assets under custody (AuC) finished the year at $23.5 trillion, up by 3% over the quarter.

According to JP Morgan’s quarterly statement, the increase in revenue was driven by “higher interest rates and deposit growth, as well as higher asset-based fees driven by improving market levels.”

Speaking on the US bank’s fourth quarter earnings call, Dimon lauded improvements it has made to its custody and fund services technology. “In the custody, in fund services business, we got a great new technology…. Service levels have gone way up, and I’m embarrassed to say that we weren’t particularly good a couple of years ago,” he said.

At the beginning of last year, JP Morgan’s chief executive of the corporate and investment banking unit, Daniel Pinto, explicitly highlighted plans to enhance its technology capabilities for the custody and fund services business, promising to increase its technology budget by 30%.

The bank has been on a path to modernize its internal systems over recent years, and is determined to reach a point where its technology is an enabler for clients to achieve scale. A large part of its work has been focused on improving how its clients gain access to its securities services platform.

“We have looked at our user experience on an end-to-end basis and assessed how deployment can align with the firm as opposed to the custody business alone. One of our aspirations is to optimize the rollout of workflow tools we have around day-to-day processing, and get that onto clients desktops,” Chris Rowland, global head of custody for JP Morgan, told Global Custodian last year.

JP Morgan was the first of the global custodians to release its fourth quarter and end-of-year results.