Leigh Watson, executive general manager for asset servicing at National Australia Bank, is filling a page with doodles with his employer at the centre.

Watson, head down, drawing neat boxes on the paper in front of him, rejects suggestions Australia’s biggest custodian is losing its grip on its customers following decisions by QSuper and SunSuper to ditch National Australia Bank for State Street.

“Of course we’re disappointed to lose clients but we’re really confident that we will win new clients and continue to service existing ones,” says Watson.

National Australia Bank, he says, has won nine new custody clients in as many months. In Australia the bank has a 30-per-cent market share of assets under custody or $540 billion, according to the Australian Custodial Services Association whose latest figures are from December. Its closest competitor, JPMorgan Chase Bank, has $367 billion of assets under custody.

Globally, National Australia Bank has $613.8 billion in assets under custody.

Watson says the bank is spending as much as $70 million annually on technology related to its asset-servicing business. The bank has increased spending on client and data-facing delivery portals by 50 per cent in the last 18 months.

“That’s resonating with existing clients,” says Watson. “We always look for efficiency.”

He rejects suggestions that competitors such as State Street and JPMorgan may be in a better position to win custody clients because they can call on expertise and technology developed for the global market.

“We support very well our clients globally through our cornerstone relationship with BNY Mellon,” says Watson.

For 16 years Bank of New York Mellon has been National Australia Bank’s partner in helping manage the non-Australian custody needs of Australian funds.

National Australia Bank is also working with another US bank, Brown Brothers Harriman, on offshore fund administration and New Zealand’s MMc on local-fund administration.

In Asia, National Australia Bank is pushing to become the sub-custodian here for funds based in the region.

“There is strength in our local capability,” says Watson.

He says the wave of custody reviews its asset management customers have subjected the bank to is largely over for this year. Still, he says the custody business is subject to “aggressive pricing”.

“There is pressure on funds to deliver returns and do more for their members,” says Watson.

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