John Lappin reports on the IPE survey
Custodian banks are increasingly competing with each other on the same terms, with banks identifying similar key service areas on offer to European pension fund clients, ac-cording to the IPE Custody Survey.
The institutions surveyed ranged from long established names such as Mellon Trust and State Street to those more recently formed, although the new names such as Credit Agricole In-dosuez and RBS Trust Bank are clearly not new entrants to the markets.
The two most often cited services are unsurprisingly settlement and securities lending which nine institutions list among their five key areas. This is followed closely by performance measurement, cited by seven.
Six banks listed on-line reporting as a priority, in an area where there is clearly room for competition. Some emphasised their own tailored ap-proach while others such as Bankers Trust Company named the service they used, in this case British Telecom's on-line reporting system.
Global custody is given as a priority by five banks with another two, Mees-Pierson and Citibank saying that custody outsourcing services were im-portant. ABN AMRO highlights its high quality basic custody covering settlement, income, corporate act-ions and tax reclaims". It should also be noted that other banks included aspects of accounting and taxation within other categories.
The Bank of New York (BoNY) provided the most comprehensive ans-wer, making a clear distinction be-tween key services and value-added ones, a distinction also made by Ban-kers Trust Company. Among value added services, BoNY included "mul-ti-currency performance measurement and analytical capabilities to provide security level performance and custom taxonomies for both global equity and global fixed income portfolios".
There were, of course, distinctive approaches taken by some. Citibank was, for example, the only bank to list knowledge of the move to private pension provision in Europe. Chase Global Investor Services, in particular, concentrated on matters of style including long term commitment to the custody business and local market and industry knowledge.
The only areas where comparisons were not possible was on cost and val-ue for money, where banks would not be likely to volunteer their opinions."