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Global Finance editors and reporters, with input from expert sources, selected the winners from the financial institutions that reliably provide the best custody services in local markets and regions to global custodians, broker-dealers and institutional investors. We chose winners in eight regions and in 35 countries. Our criteria included customer relations, quality of service, competitive pricing, smooth handling of exception items, technology platforms, post-settlement operations, business-continuity plans and knowledge of local regulations and practices.
HSBC, which calls itself “the world’s local bank,” won 15 awards, far more than any other bank, thanks to its strong showing throughout Asia and the Middle East. Citigroup was second, with five awards, including regional honors for Latin America.
While BNP Paribas repeated as the best sub-custodian for Western Europe, it faces growing competition from Citigroup. The US bank in June 2005 opened a new custody and clearing center in Breda, the Netherlands, following its acquisition of ABN AMRO’s direct custody, securities clearing and fund-services business in eight markets last October.
Consolidation in the sub-custody business continues, as margins narrow and technology advances. The need for major investments in systems and people to remain competitive makes the provision of sub-custodial services an area that not every bank wants to pursue. Those with economies of scale and the specific expertise needed to provide quality service are still able to make a good living at it, however, and are enjoying fundamental growth in areas such as risk monitoring and correspondent brokerage, according to industry participants.