GLOBAL - Service levels from global custody providers have risen over the past year, according to the latest R&M Global Custody Survey.
Rated on a scale of 1 (worst) to 7 (best), banks offering custody services scored an average 5.74, compared with 5.70 in 2009.
Pension funds again ranked Credit Suisse in top place, with a score of 6.47, an improvement of 0.17 over last year. Second came UBS (unplaced last year) on 6.37 and third, Pictet, last year's runner-up, which scored 6.36.
Credit Suisse was also top among European (excluding UK) pension funds, scoring 6.47. It was followed by Pictet and UBS on 6.34 and 6.32 respectively.
However, UK pension funds gave first place to BNY Mellon, which was also top dog in 2009, with 5.93. Northern Trust (fourth last year) was second on 5.47, with State Street - last year's runner-up - in third spot with 5.36.
The survey was based on a questionnaire containing 44 different parameters such as the quality of trade settlements, income collection, foreign exchange and securities lending. Respondents ranked custodians on a scale from 1 to 7.
Almost 900 responses were received, the vast majority from organisations in Europe and North America. Of these, 70% were global fund managers and 30% pension funds.
Among the "experts" (respondents who rated five or more custodians), the top slot went to Brown Brothers Harriman, with BNY Mellon - last year's winner - as runner-up, and State Street in third place.
On an overall basis, the top bank was UBS AG with an average score of 6.46. Second came RBC Dexia on 6.32, with Pictet third on 6.10.
But the overall table included only those banks featuring in at least 30 responses and three different geographic regions. This meant that Credit Suisse, for instance, was excluded.
Northern Trust was the most improved bank in the 2010 survey, with a score of 5.56, 0.23 more than last year's score. Citibank and UBS AG came second and third respectively.
"The survey gives banks' clients a benchmark to compare the performance of different custodians," says Richard Hogsflesh, managing director, R&M Surveys. "It also provides feedback we can give the banks on how to improve their services."
According to Hogsflesh, banks performed best on the experience and knowledge of relationship managers, while the biggest criticisms were for interest rates on cash balances and the accuracy of processing alternative investments.
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