In the first half of 2022, the assets held under custody for Australian investors dropped 8.1 per cent to $4.3 trillion, data from Australian Custodial Services Association (ACSA) has revealed.
According to ACSA, the decline in assets reflected the difficult period in financial markets along with adjustments to methodologies made by some ACSA members.
Within the overall assets held on behalf of local investors, Australian assets recorded a decline of 7.1 per cent while offshore assets suffered a 10.3 per cent fall. Meanwhile, assets held in Australia on behalf of offshore investors fell by 10.1 per cent.
ACSA CEO David Travers said that the recent market volatility in Australia and globally, as well as shifting economic and geopolitical landscapes, were clearly evident in its latest figures.
“Relative movements of ACSA member data in the June report also reflect consolidation of custody mandates in many cases,” he added.
J.P. Morgan was the top provider by assets under custody with $983.7 billion, down 11.4 per cent on the previous half, followed by Northern Trust ($679.3 billion), Citigroup ($678.8 billion), State Street ($625.4 billion) and NAB Asset Servicing ($509.4 billion).
BNP Paribas ($441.9 billion), HSBC Bank ($197.1 billion), Clearstream ($104.2 billion), Netwealth ($55.7 billion) and Apex Group ($25.8 billion) rounded out the top ten.
ACSA said that asset servicing providers in Australia settled 12.8 million trades during the half, a reduction of 3.4 per cent compared to six months prior, with ACSA members settling an average of approximately 98,000 trades per day on behalf of their clients.
“Looking ahead, ACSA members will continue to focus on their response to changing regulatory data reporting requirements, their evolving role in supporting institutional involvement in digital assets including cryptocurrencies, and the implementation of the ASX’s DLT-based replacement for CHESS,” said Mr Travers.
“Innovation, digital asset evolution and standards will be critical to achieving efficiency in custody and investment administration,” Mr Travers concluded.
“ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces.”
