UK - National Australia Bank is shutting its UK custody arm, National Custodian Services, due to market consolidation and price pressures.
NCS’s clients will be given the option of transferring to The Bank of New York.
Consultants say NAB’s decision will hit small schemes hard, especially as the market has consolidated and the large global custodians are reluctant to take their business.
Mercer Investment Consulting head of European custody group Mark Walker said: “A smaller universe than the one that currently exists is not a good thing. Choice is good. NCS was more prepared to take smaller clients than some of the bigger players and while most of them will do so, there are huge minimum fees.
“Custody is a scale business, so a £15m segregated client is not that attractive to some of the large global custodians. It is disappointing when custodians exit the market because when you already have a limited choice to start off with, you have even less afterwards.”
Thomas Murray ratings director Roger Fishwick added: “It is unfortunate that the continuing price pressure and consolidation in the UK has lead to the withdrawal of what was a very promising “renaissance” provider in the market.”
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As a hectic 2018 draws to an end, Jonathan Stapleton wishes readers a quieter 2019.