Large publicly traded banks' assets under custody and administration continued their slow but steady climb through 2013 into the first quarter of this year, and their asset servicing revenue saw similar percentage gains.
Bank of New York Mellon Corp. remained the largest custodian in the quarter ended March 31, with total assets under custody and administration of $27.9 trillion, up 1% from Dec. 31 and 6% higher than the first quarter 2013.
State Street Corp. came in a close second, at $27.5 trillion, a 0.2% gain from the previous quarter and 8.1% higher than a year earlier.
J.P. Morgan Chase & Co. reported $21.1 trillion in AUC, up 3% from three months earlier and 10% higher than March 31, 2013, and Citigroup Inc. had AUC of $14.7 trillion, up 1.4% from the previous quarter and 8.8% above the first quarter of last year.
Northern Trust Corp., with $5.25 trillion in assets under custody, had the highest percentage gains for the quarter and year, at 3.2% and 14.5%, respectively. That 12-month growth reflected “both sizable new business wins and a strong client retention rate,” Steven Fradkin, president of Northern Trust's Corporate & Institutional Services, said in an e-mail response to questions
All five banks in their first-quarter earnings statements attributed the quarterly AUC gains to new business, while the 12-month increases were also the result of favorable equity markets.
Revenues for the banks' asset-servicing businesses also saw steady increases for both the quarter and year. State Street reported revenue of $1.24 billion as of March 31, up 0.5% for the first three months of 2013 and 5.4% higher than a year earlier. BNY Mellon, meanwhile, had $1.01 billion in asset servicing revenue, up 2.5% and 4.1%, respectively.
J.P. Morgan Chase had first-quarter securities services revenue of $1 billion, the same as the fourth quarter but up 4% from the first quarter 2013. Citigroup no longer breaks out asset servicing revenue.
Northern Trust's asset servicing revenue was $252 million in the latest quarter, 0.4% higher than the start of the year and 12.5% above the first quarter 2013.
Among the banks that broke out securities lending revenue in their statements, State Street reported $85 million, up 11.8% from Dec. 31 and 9% higher than the first quarter last year; BNY Mellon reported $38 million, up 23% for the quarter but down 2.6% from March 31, 2013; and Northern Trust had $23 million, up 4.5% for both the quarter and the year.
The first-quarter increases reversed securities lending revenue declines of 19% at BNY Mellon and 4% at Northern Trust in the fourth quarter. State Street had a 2.7% gain in securities lending revenue in the last three months of 2013.