Custody: Custody is dead, long live custody
Consolidation has been the big theme in the global custody industry during the 1990s. As the business has become ever more commoditized and the technology involved ever more complex, so many banks' commitment has wavered, and in numerous cases cracked.
JP Morgan and Morgan Stanley have been two of the more high-profile departures from the fray. JP Morgan off-loaded its portfolio to Bank of New York in 1995, Morgan Stanley sold its custody business to Chase in late 1998.
The latest bank to decide to quit the business is Royal Bank of Scotland. In late March it announced the sale of its custody arm, RBS Trust Bank, to Bank of New York for more than £500 million ($815 million). When completed, the deal will catapult Bank of New York to the top of the global pecking order with $5.9 trillion worth of assets...
