J.P. Morgan held on to the top spot among custodians as total assets under custody in Australia fell 1.2% in the half-year ending December 31.
Lacklustre markets pushed the total assets under custody down to $3.58 trillion in the period, according to the Australian Custodial Services Association (ACSA) which has been reporting the data for 25 years now.
J.P. Morgan has a 22% slice of this pie with custody contracts for the likes of AustralianSuper and HESTA. It first toppled NAB Asset Servicing from the top spot in the first half of 2016.
BNY Mellon was the fastest growing custodian during the period as it almost doubled its assets under custody from about $12 billion to $24 billion.
Apart from this, the top ten custodians remained largely unchanged: J.P. Morgan ($798 billion), NAB Asset Servicing ($529 billion), BNP Paribas ($470 billion), Citigroup ($461 billion), State Street ($447 billion), Northern Trust ($403 billion), HSBC ($180 billion), RBC Investor and Treasury Services ($106 billion), Bond Street ($98 billion), Ausmaq ($53 billion), BNY Mellon ($24 billion) and Netwealth ($19 billion).
Custodians usually charge fees as a combination of total assets under custody and per transaction, with the exact mix varying from contract to contract. While the total assets fell during the period, the transaction volumes picked up.
Total Australian settlement transaction volumes rose 5.3% in the period while total Australian unlisted unit trust registry transaction volumes rose 19.9%.
ACSA chief executive Robert Brown said the assets supported by the custody industry have grown significantly over the past 25 years.
"Australian investors have witnessed a more than three-fold increase in domestic assets, and a near six-fold increase in global assets. Inbound investment into Australia (assets held in sub-custody) totalled $283 billion in 1994 - growing over five-fold in value to December last year," Brown said.
ACSA chair David Knights said: "The ability of the industry to service this remarkable growth in assets, rising complexity and regulatory change demonstrates the sector's ability to adapt. We see no sign of the need for this agility diminishing as we work with our key client sectors to support their needs and handle disruption."
"Key themes like increasing demands for data, a backdrop of significant regulatory change and the challenges of working through the revolution in market infrastructure presented by the replacement of CHESS are just some of the near term challenges."