BNP Paribas Securities Services looks to build on Asia success

09 December 2013   Category: News, Asia, Australia, China, Hong Kong, India, Japan, Singapore   By Hui Ching-hoo

Paris-based custodian giant BNP Paribas Securities Services is looking to deepen its penetration in Asia Pacific in an effort to capitalise on the trend of asset managers’ expansion within the region.  

Patrick Colle, CEO of BNP Paribas Securities Services, tells Asia Asset Management that the bank has been making noteworthy progress in expanding its turf in the Asia Pacific region in recent years with the setup of local custodian operations in Hong Kong, Singapore, India and Australia as well as the establishment of teams on the ground in China and Japan: “For example, the company has recently launched its securities lending desk in Hong Kong to complement the lending desk in Sydney,” he said.    

Currently, around US$260 billion of the company’s assets under custody are sourced from Asia Pacific. Australia is currently its largest market in the region in terms of revenue contributions but Asia is growing at momentous pace.  

Mr. Colle says one of the biggest successes for the firm this year was the completion of the regional middle and back office outsourcing project for Nikko Asset Management. “We would see more mandates like this as an increasing number of asset management giants expand their businesses Eastward. The company will definitely benefit from this trend with the wide array of unique services and solutions it can offer to its clients.”

BNP Paribas Securities Services is ranked as the fifth largest custodian bank worldwide with total assets under custody of around US$8 trillion. It is the only non-US player among the top five players. Mr. Colle states that the bank is striving to close the gap with the top players via both organic business growth and targeted acquisition. For example, it acquired Commerzbank’s depotbank business in Germany. “We keep looking for acquisition opportunities globally,” he reveals. He also identifies Ucits global fund distributions and the RMB fund flows across Hong Kong, Singapore, London (and soon Paris) with China, as well as Islamic platforms in countries such as Malaysia, Singapore, and the Middle East as the key drivers of its business growth for the asset manager segment in the Asia Pacific.

Mr. Colle goes on to say that whereas the industry currently may not be over-regulated, it is in danger of becoming so. This, together with the impact of capital ratio and liquidity ratio, has resulted in a shift from equities to government bonds. He also points out that it can be difficult for custodians to cope with the dilemma of regulations arising from various different jurisdictions although some of the regulations in the US and EU do overlap.