BNP Paribas Securities Services has long experience as a provider of custody and asset servicing in the fragmented markets of Europe, and is increasingly applying its expertise and scalability in Asia Pacific.
As part of a universal bank, it can also provide its clients with complete, integrated support along the order chain from trade execution to post trade and custodial services. This sets it apart from exclusively trust banks and also gives it an edge against global and regional rivals competing in Asia Pacific’s rapidly changing investment landscape.
Earlier this year, BNP Paribas Securities Services appointed Philippe Benoît as its Hong Kong-based head of the Asia-Pacific region. Previously, global head of finance, legal and ALM treasury for BNP Paribas Securities Services in Paris, Benoît is now responsible for expanding the securities services business in Asia Pacific, which has more than tripled its assets under custody during the past five years.
“Our priorities as a trusted partner are to accompany our clients’ growth expansion plan as a multi-asset service provider; to enhance our offering through innovative solutions across the region; and to promote BNP Paribas’ differentiating features through thought-leadership and branding,” said Benoît, from his Hong Kong headquarters.
BNP Paribas Securities Services is active in 34 countries around the world, employing over 9,500 staff, earned revenues of close to €1.8 billion ($2 billion) in 2015 and is the fifth largest custodian with around $9 trillion in assets under custody.
Securities Services is now present in eight markets in the region – Australia, China, Hong Kong, India, Japan, Malaysia, New Zealand and Singapore, where it employs more than 2,500 people – and is placed among the leading custodians in Asia Pacific.
Its franchise in the region took off in the wake of the 2008 global financial crisis.
“The bank devoted resources to building its business to become fully competitive in key markets, for example, winning mandates from Australian superannuation funds, global asset managers and international insurance companies, as well as collecting awards from leading publications,” said Benoît.
In 2016, AsianInvestor named BNP Paribas Securities Services the “Best Bank for Cross-Border Custody in Asia”.
Notable recent announcements include a partnership with Maybank in Malaysia to provide asset servicing for the ASEAN CIS passporting and AIA Group for OTC derivatives collateral access services.
Changing horizons and staying ahead
In fact, middle-office outsourcing and external collateral management is an important trend within asset management and investment banking. It allows the buy-side to concentrate on its core competencies and helps the sell-side save costs; it means that both can devote resources to expanding while removing bottlenecks and also reducing operational risks.
The bank is leveraging its European client base, which includes major investment houses such as Aberdeen Asset Management, BNP Paribas Investment Partners and Henderson Global Investors, as its grows in Asia Pacific and partners with regional clients, such as AMP Capital and Nikko Asset Management, as they move into international markets.
It is keen to establish and maintain long-term relationships with its customers, offering cross-border services and access to the bank’s international investment products, ranging from financial instruments to real estate.
China is clearly an important market for the bank, where it is one of four leading international participants for the RMB internationalisation direct access schemes. The bank provides full cross-border services for institutional investor inflows, as well as execution and reporting services for Chinese insurers’ overseas portfolios.
Benoît believes eventually the direct access schemes will replace the quota programs, and the bank is positioned to partner clients who are interested to access China in a seamless manner. The Shanghai-Hong Kong Stock Connect, Mutual Recognition of Funds and China Interbank Bond market schemes are examples of China opening directly to foreign investors. Through these programs, an integrated broker-to-custody model and cross-border servicing capabilities are the keys to success in understanding both the onshore and offshore servicing requirements.
Furthermore, as the leading distributor of Ucits (Undertakings for Collective Investments in Transferable Securities) in Europe, the bank is well-placed to be a major distributor of global funds in Asia Pacific too, in parallel with its involvement in local initiatives such as the ASEAN Collective Investment Scheme Passporting and the Apec Asian Regional Fund Passport.
The long-term vision to harmonise Asia’s financial markets will create additional investment opportunities for Ucits, an area where BNP Paribas Securities Services is participating with regulators and playing a key advisory role.
Led by Benoît, BNP Paribas Securities Services has a clear Asia Pacific strategy to act as the local custodian of choice for its clients within the eight major regional markets and to provide a bridge as global custodian as they expand internationally.