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State Street replaces Deutsche Bank as subcustodian
Severance of ties a big blow to German bank but presents a big opportunity for rivals in Asia
27 Jan 2021 | The Asset

State Street’s termination of Deutsche Bank as its subcustodian, as reported by Global Custodian, is a big blow to the German custodian bank but would be beneficial to its competitors in Asia.

Deutsche Bank has subcustody operations in Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, UAE, Saudia Arabia, and Vietnam. In China it services its clients in Bond Connect and Stock Connect.

Anand Rengarajan, Asia-Pacific head of securities services at Deutsche Bank, comments: "We are 100% committed to our securities services business, particularly in APAC where we see strong growth. This commitment to the business is evidenced by a number of digitally-driven solutions we have recently implemented via our partnership with Xceptor to automate the bank’s core processes in Indonesia or our collaboration with Singapore fintech STACS on a digital assets POC (proof of concept) for example."

"We have also rolled out four application programming interfaces (APIs) in 2020, one of which was developed in collaboration with BNY Mellon to automate FX confirmation times in emerging markets. We also continue to expand our services, for example with our new local custody licence and ability to facilitate margin trading and securities borrowing in China under the new QFII/RQFII (qualified institutional investor and renminbi qualified institutional investor) rules. We value our clients’ trust and business and are determined to remain a key player in the securities services market both in the region and beyond,” he adds.

State Street uses other subcustodians in the region particularly BNP Paribas, Citi and HSBC.

Deutsche Bank’s asset servicing operations have suffered from the fallout of the scandals that have impacted the bank’s investment banking businesses in recent years.






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