NAB Asset Servicing Business Announces Closure, Citing Losses

​The big four bank has confirmed it will close NAB Asset Servicing, following years of mandate losses.

The move comes as part of the bank's ongoing strategic review, having tried to offload the business for several years now. It will be wound up over the next three years, with the closure planned for 2025.

"The decision to wind down the NAB Asset Servicing business has not been taken lightly," NAB executive asset servicing John Comito said.

He added that the business recognises the appointment of a new custodian is an important decision for existing clients.

"We are focused on continuing to meet our clients' obligations at the high levels we are known for, while supporting a seamless transition to new specialist providers that have global reach and meet our clients' long-term needs," Comito said.

"We anticipate the wind down of the business will take approximately three years and throughout this period we will offer career transition and support to our colleagues who have deep specialist knowledge and have created a true client-centric culture."

A spokesperson said there will be no changes to employees' roles for at least the next 12 months.

NAB Asset Servicing currently oversees the assets of Brighter Super, having been the custodian for Energy Super and Suncorp's superannuation business.

It's also custodian for Equipsuper, Guild Group and Crescent Wealth, as well as Mason Stevens, Fiducian and the University of Sydney.

It previously held several other super fund mandates, but many were the subject of mergers in recent years, like Maritime Super and Statewide Super.

Another significant loss was that of CareSuper in the first half of 2021 after more than two decades as its custodian.

To its credit, NAB is the only major domestic bank still providing custody services in Australia, having itself acquired Commonwealth Bank's custody business in 2003.

Westpac offloaded its custody business to HSBC in 2006, while ANZ exited the space when it sold its custody arm to J.P. Morgan in 2009.

NAB Asset Servicing was long a leader in the local custody sector but has steadily descended the league tables in recent years.

It held the top spot until 2016 when it was overtaken by J.P. Morgan. At that time, it had assets under custody of $564 billion, but they've gone backwards since.

As of June 30, according to the Australian Custodial Services Association, NAB Asset Servicing had $509.4 billion.

J.P. Morgan remains the largest custodian with $983 billion in assets, despite an 11.4% decline since the start of the year. NAB Asset Servicing is now fifth largest behind Northern Trust, Citigroup and State Street.

(Source: Financial Standard)