Europe has become the hot area for the U.S.-based custody and asset-servicing firms, with some major players reporting growth of more than 40% last year.
"The main drivers of growth in the European markets are the beginning stages of pension reform in many countries and (pension fund) privatization," said Jay Hooley, executive vice president and head of investor services at State Street Corp., Boston.
"Some of the markets in Europe are not as mature as in the U.S.," providing more growth opportunities, agreed Patric Foley-Brickley, European sales director of Citigroup, London.
The statistics tell the story:
-- State Street, with $8.8 trillion in assets under custody and administration, is the dominant global player. Officials would not break out the European figures, but sources said growth outside the United States has grown 50% more than its U.S. business in the past five years.
-- Northern Trust Co., London, which has $1.9 trillion in assets under custody and administration worldwide, had an increase last year of about 40% in its custody and asset servicing business in Europe, with total assets under custody in Europe growing to about $500 billion.
-- Mellon Financial Corp., London, which has $2.6 trillion globally in assets under custody and administration, reported custody business in Europe growing around 30% a year.
-- J.P. Morgan Investor Services had about a 16% growth in European custody assets, with total European assets as of Sept. 30, growing to 870 billion pounds ($1.4 trillion) from 752 billion pounds a year earlier. J.P. Morgan has total assets under custody of $6.7 trillion worldwide.
-- Citigroup's European custody and asset servicing business increased about 14% in 2003, with $889 billion under custody and administration. The firm has $5.3 trillion in assets under custody and administration globally.
-- Bank of New York, London had a 5% growth rate for its pension fund custody assets over the past year and now has 200 billion pounds under custody across Europe. BNY has $7.9 trillion in total custody and administration assets worldwide.