Genworth Financial in Australia has hired Bank of New York Mellon (BNY Mellon) as custodian of its $3.1 billion insurance portfolio.

Australia’s largest mortgage insurer chose the US bank over incumbent custodian JP Morgan to service its portfolio of Australian fixed income securities, says a person familiar with the matter who requested anonymity. The portfolio helps Genworth meet its insurance liabilities and the liquidity requirements set by the prudential regulator.

As domestic sub-custodian for BNY Mellon, National Australia Bank (NAB) will profit from the deal by providing services that include settling transactions, processing payments and reporting for the Genworth portfolio. The Wall Street bank outsources the custody of clients’ Australian-domiciled assets to NAB because it does not operate a domestic master custody business.

BNY Mellon is custodian for Genworth in the US, where the Richmond, Virginia-based company holds about US$100 billion in assets. JP Morgan became custodian for the Australian business in February 2007 but in 2009 the parent company decided to shift these duties to BNY Mellon.

In Australia Genworth has 50 per cent market share of the mortgage insurance market and has underwritten about $300 billion of Australian mortgages since 1965, according to the company’s website.

A Genworth spokesman declined to comment on the change of custodian.