[ I N D E P T H | G L O B A L C U S T O D I A N S ]
from transaction fees , net interest income , and assets under custody and administration , there is much work to be done .” Over four years of quarterly reports , AUC / A increases were highlighted by banks as an encouraging stat among otherwise underwhelming figures . Asset managers have had a strong focus on lowering fees from their asset servicers – essentially passing on their own fee pressures – and that trend , coupled with a shift to regional custodians , and the previously highlighted pressures – led to multiple players pulling away from the space across the world .
Back in business Table 1 shows the difference in AUC / A ( or just AUC in some cases ) between the end of 2021 and the end of Q2 2022 from data collected by Global Custodian * among a handful of custodians that report their data quarterly . However , table 2 comes hot off the press from Coalition Greenwich in what is proving to be a banner year for custodians when it comes to revenues . The 12 largest banks posted the highest
“ Collectively , the banks pulled in $ 19 billion from January to end of June , with custody revenues accounting for $ 9.6 billion – the highest since 2018 , and second highest on record .”
revenues during the first six months of the year since it began tracking data in 2015 . Collectively , the banks pulled in $ 19 billion from January to end of June , with custody revenues accounting for $ 9.6 billion – the highest since 2018 , and second highest on record . In the Q2 earnings , we saw some astonishing results from many of the largest custodians : BNY Mellon up 10 % year-on-year , BNP Paribas and Citi both up 16 %, while Societe Generale saw a whopping 41 % uptick . While these swings might be more commonly seen in the investment banking world , the steady business of custody seldom sees such jumps . These results followed a positive Q1 where Citi , JP Morgan and Northern Trust posted increases , and BNY Mellon even emerged flat despite a significant hit from the war in Ukraine . So , what does this tell us about the current state of custody ? Well , to put it simply , the future is bright . Any worries about commoditised services dampening projections for the custody business of the future may have gone away for a number of reasons .
The dawn of a new era Firstly , it does seem as though automation and technology can
22 Global Custodian Fall 2022