Total assets under custody for Australian investors rose by 0.6 per cent over the second half of 2022 to $4.3 trillion, according to data from the Australian Custodial Services Association (ACSA).
The slight increase in assets under custody was recorded despite the challenging and volatile market environment over the period and marked an improvement on the 8.1 per cent drop seen in the first half of last year.
The peak industry body for custodians and asset service providers in Australia reported that assets held on behalf of Australian investors in Australia declined by 0.5 per cent in the six months to 31 December 2022, while offshore assets held increased by 3 per cent.
Meanwhile, assets held in Australia on behalf of offshore investors rose by 3.3 per cent to $1.8 trillion, and total assets under administration lifted by 3.2 per cent to $5.1 trillion.
While the latest figures paint a more positive picture for the Australian custody sector than seen in the first half of last year, ACSA chief executive David Travers warned that ongoing local and global market volatility, as well as shifting economic conditions, remain a challenge.
“Member organisations continue to see the industry consolidation impacting the relative movements of ACSA member data in the December report,” he said.
“Looking ahead, ACSA members will continue to focus on their response and feedback to changing regulatory requirements, their evolving role in supporting institutional involvement in digital assets, including cryptocurrencies, and the future direction of the ASX’s CHESS replacement project.
“Innovation, digital asset evolution and standards remain critical to achieving efficiency in custody and investment administration.”
J.P. Morgan remained the top provider by assets under custody at $1.02 trillion, a 3.3 per cent increase on the previous half, ahead of Northern Trust ($718.2 billion), Citigroup ($693.6 billion), State Street ($595.6 billion), and NAB Asset Servicing ($511.4 billion).
ACSA reported that asset servicing providers in Australia settled 12.3 million trades in the second half of 2022, a 3.6 per cent reduction compared to the previous half. ACSA members settled an average of approximately 94,500 trades per day on behalf of clients.
“ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces, which draw on the extensive expertise of member custodians,” Mr Travers concluded.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
