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China
Standard Chartered Bank
The bank retains its status as the highest-scoring and
most-consistent custodian bank in China. The average scores
are also soundly based, on an impressive turnout by more
than twice as many clients as its keenest rival. They clear
the local and global benchmarks with contemptuous ease,
and comments have that detailed flavour characteristic of
more-than-satisfied clients who are simply mystified that
anything could possibly have gone wrong. “Cannot access
SCB occasionally (due to system maintenance/glitch?),
which delays our processing time,” writes one respond-
ent. “Trade already sent to bank; however, securities team
cannot see them – manual trade instruction sent again.”
Where Standard Chartered could be better still in Chi-
na is on the banking side, but even when it comes to cash,
credit and collateral the bank outshines its average peer. Deutsche Bank
The German bank has built an outbound as well as an inbound
franchise in a strategically important market in a region where
it expects to grow. However, the custody team in Shanghai has
not sustained the strong performance of a year ago. Though
Deutsche continues to shine in relationship management and
client service (“good service and excellent communication”
writes a client) and impresses in at least one service area (“well
informed on regulation and compliance”) there is a lack of con-
viction about the scoring in other areas.
HSBC
HSBC has not arrested the slippage evident here a year ago. Al-
though “good service” is the economical judgment of one client,
the average scores do not bear it out. They are unimpressive in
areas that were problematic in 2017 (such as pricing and asset
servicing) and in new fields (such as innovation and liquidity
management) too. The bank is adrift of the undemanding local
benchmarks in multiple service areas. Respectability hinges on
client service, where the verdict a year ago was as flattering as
ever, but not every respondent is appreciative in 2018. “Do not
respond to emails,” writes one. Citi
The mainland China arm of Citi fell short of securing enough
responses to guarantee a rating here. The responses that were
received speak of greater confidence in Citi as counterparty than
as a service provider.
ICBC
The largest custodian bank in China has attracted a handful of
responses from non-domestic clients. Their scoring of ICBC
indicates that the bank is meeting its goal of getting closer to
clients, but needs to invest more in the services themselves.
Others
Responses were also received for two other members of the
quartet of powerful state-owned commercial banks, in the shape
of Bank of China and China Construction Bank, both of which
have formidable domestic custody franchises.
WEIGHTED AVERAGE SCORES
Standard
Chartered Bank
HSBC
ICBC
Deutsche Bank
Citi
China Construction
Bank
Share of validated responses (%) 40% 17% 8% 10% 6% 6%
Relationship management 5.51 5.03 4.85 5.13 n/a n/a
Market
Average Global Average
5.13 5.30
Client service 5.66 5.00 4.00 3.90 n/a n/a 4.99 5.56
Account management 5.48 5.06 3.83 3.64 n/a n/a 4.89 5.14
Asset safety 4.91 4.36 2.50 3.22 n/a n/a 4.35 4.60
Risk management 5.78 5.36 4.38 4.07 n/a n/a 5.07 5.50
Liquidity management 5.68 4.29 4.20 4.00 n/a n/a 4.69 5.14
Regulation and compliance 4.82 4.80 n/a 2.29 n/a n/a 4.33 4.84
Innovation 5.02 4.10 4.00 3.46 n/a n/a 4.48 4.75
Asset servicing 5.78 5.60 4.79 3.74 n/a n/a 5.08 5.52
Pricing 5.56 4.51 4.59 5.18 n/a n/a 4.93 5.28
Technology 5.28 5.38 4.79 4.53 n/a n/a 5.02 5.41
Cash management and FX 5.56 5.27 4.60 4.62 n/a n/a 5.10 5.42
Total 5.44 4.93 4.33 4.07 n/a n/a 4.89 5.23
64
Global Custodian
Winter 2018