Home / News / NAS sale falls through (again)

NAS sale falls through (again)

Talks between NAB Asset Servicing and HSBC for the latter to take charge of the former’s 30 largest clients have allegedly faltered.
News

HSBC was understood to be looking to do a deal similar to that which Citi completed last year with Royal Bank of Canada (RBC) whereby it took over almost all of the former RBC asset servicing clients in Australia. But the deal, first rumoured in March is off – for reasons currently unknown. However, NAS will still make an effort to simplify its business by pushing at least 30 of its smaller clients onto other custodians.

As to why the sale fell through, your guess will likely be as good as ours – though a sticking point in past attempted sales (of which there have been a great many) has been the lucrative cash and FX part of the business, which NAS has historically tried to keep. The highest bid ever made for NAS – which currently sits at fifth on the Australian Custodial Services Association table – was around $1.6 billion, from State Street. That bid included the cash and FX business, which goes hand in glove with custody. But nobody is going to pay a lot of money for the core custody business without the value-add services.

NAS has also previously rebuffed offers from J.P. Morgan as far back as 2003, in a plan known by J.P. Morgan as “Project Mexico” (south of the border) which would result in NAS running J.P. Morgan’s own domestic custody business and the US bank taking over NAS’ global custody, then run by BNY Mellon. NAS has also turned down at least one other offer from State Street since.

HSBC recently recruited State Street veteran Sinclair Scholfield for an expected expansion of its Australian master custody business, and the NAS acquisition would have given it significant scale to compete in what other custodians are describing as a time of “chunky winners and losers”. Still, it’s not all bad news for HSBC; its appointment as global custodian to ETF Securities, announced earlier this week, will come as something of a consolation prize.

HSBC declined to comment. NAB did not provide comment before deadline.




Print Article

Related
‘Light at the end of the tunnel’ for emerging market debt

After a damaging year, the “massive technical headwinds” for emerging market debt are easing. And the biggest opportunities might be the smallest parts of the benchmark.

Lachlan Maddock | 7th Dec 2022 | More
A cathartic moment after turmoil of 2022

The chaos of 2022 has reset valuations to the point where they’re hard to ignore, according to J.P. Morgan Asset Management. That doesn’t mean the future of markets is any less cloudy.

Lachlan Maddock | 7th Dec 2022 | More
Although expected, rate rise weakens market

The Australian share market eased on Tuesday as the eighth consecutive rate hike from the Reserve Bank saw the cash rate lifted by 0.25 percentage points, to 3.1 per cent – up from 0.1 per cent in just seven months. The rate hike was mostly expected, and the central bank indicated that further tightening was in store in…

Drew Meredith | 7th Dec 2022 | More
Popular
1
‘In good markets and bad’, Super Fierce finds top 15 funds
Lachlan Maddock | 15th Jul 2022 | More
2
‘An art, not a science’: 15 years of PE lessons from QIC
Lachlan Maddock | 5th Aug 2022 | More
3
Time for a reality check on 15 per cent super
Lachlan Maddock | 1st Jul 2022 | More