Suncorp’s securities services mandate, which was put out for tender at the end of last year, has been won by BNP Paribas Securities Services. The mandate was previously held by NAB Asset Servicing on a five-year deal. Suncorp, though, also holds a one-year option to continue with NAB, making for an easier transition period if required.
Currently involving about $25 billion in assets, the mandate is a complicated one in several respects: it may shrink with the foreshadowed sale of about $6 billion of the bank’s insurance assets which are included in the mandate following a review of Suncorp’s life insurance operations; some of the assets are cross-invested in other Suncorp products, meaning they may be carried on the custodian’s books but cannot be charged twice; and, there are many separate products in the mix which tends to make for a lengthy transition.
Insiders think that the transition will take at least 12 months and that Suncorp may well exercise its option to extend the current contract with NAB.
When NAB won the business in 2013, it did a lift-out of about 15 staff to look after the account, at Suncorp’s request, but this time there was no such arrangement. Coincidentally, the NAB relationship manager in charge of the Suncorp account is Barry Dench, who is ex-BNP Paribas.
On the Suncorp side there was also a BNP Paribas connection. The tender was run, with advice from Mercer, by Caroline Marull, the head of investment operations, who is ex-BNP Paribas, having replaced predecessor Brendan Casey, who is now the general manager, investments, for REST.
Suncorp issued a statement last Friday evening, confirming the change. It said: “The appointment of BNP Paribas is aligned not only to our operating model, but also to our strategy. We were drawn to BNP Paribas’ approach to corporate responsibility and its fully integrated technology solution which will meet Suncorp’s current and future needs.”
David Braga, head of BNP Paribas Securities Services for Australia and New Zealand, said: “We are pleased to have been selected based on the depth of our capabilities in this region. Our strategic alignment with Suncorp’s business and strong trans-Tasman capabilities mean we are well-positioned to support Suncorp’s immediate and evolving needs.
“The appointment of BNP Paribas is subject to consultation with APRA in Australia, and the FMA in New Zealand approving an amendment to the named custodian in an exemption notice.”
Greg Bright is publisher of Investor Strategy News (Australia)