Global Custody Survey 2009

Overall Survey Rankings OVERALL RANKING OF CLIENT SATISFACTION
2009					Bank	Score	Regions qualified (maximum of 4)
1					Credit Suisse Group	6.32	♦
2					UBS AG	6.31	♦
3					RBC Dexia Investor Services	6.19	♦ ♦ ♦ ♦
4					Pictet & Cie	6.09	♦ ♦ ♦
5					BNY Mellon	5.72	♦ ♦ ♦
6					Brown Brothers Harriman	5.69	♦ ♦ ♦
7					J.P. Morgan	5.53	♦ ♦ ♦ ♦
8					Northern Trust	5.33	♦ ♦ ♦ ♦
9					State Street	5.27	♦ ♦ ♦
Rankings by the Experts RANKING BY RESPONDENTS USING 5+ CUSTODIANS
2009					Bank	Score
1					BNY Mellon	5.40
2=					Brown Brothers Harriman	5.34
2=					Pictet & Cie	5.34
4					J.P. Morgan	5.32
5					HSBC Securities Services	5.25
6					Citi	5.13
7					Northern Trust	5.08
8					State Street	4.98
9					RBC Dexia Investor Services	4.69

RESULTS
Despite a harsh road test of turbulent markets and near collapse of the world's banking system, the global custody product is as robust as ever with overall satisfaction in the 2009 R & M Global Custody Survey increasing to the highest level yet achieved.

The overall table shows three Swiss banks in the top four places, although two of them only qualified in one geographic region and it's perhaps not fair to compare them to the bigger players who operate on a more global basis.  Another way of analysing the results is to look at the responses given by those experts of the industry – companies using five or more custodians.

Pride of place in the 'Experts' table is taken by BNY Mellon, climbing from third place last year.  The most consistent performer across the two main tables is Pictet, ranked equal second by the experts and fourth in the Overall Results table.  Two providers, BNP Paribas and Société Générale, failed to qualify for the main tables on account of an insufficent number of their clients completing the survey questionnaire.

Richard Hogsflesh, managing director of R & M, said: "Those of us associated with the industry have recognised for a long time that this product, the backbone of investor services, has always represented steady revenues for the banks and a solid platform from which other services can be offered.  Even in these extreme times, they have not suffered mechanical failure but have continued to service clients to the best of their ability.  It's not often you can say that about banks these days."

METHODOLOGY
The R & M Global Custody Survey measures customer satisfaction by means of questionnaires completed by a wide range of institutions around the world, being those involved in using the services of global custodians. The 2009 survey collected 845 responses, of which 764 qualified (per below).

To qualify for the survey, a global custodian's business must cover at least five countries of investment in addition to the country or countries where the global custodian and client are domiciled. The global custodian need not serve clients based in more than one country or geographical region.

In order to qualify for the overall ranking, global custodians must receive a minimum of 35 responses.

To qualify for the survey, at least 15 responses must come from third party investment managers dealing with more than three global custodians. A response from an investment manager within an organisation associated with or related to a global custodian is only allowed if that investment manager also submits responses for at least three of the third party custodians that appeared in the previous year's survey.

The survey analysis examines each of four geographical regions in turn: North America, United Kingdom, Continental Europe and the Rest of the World. These groupings reflect the geography of the responses. To qualify for each region, a global custodian must receive 10 responses from institutions in that region (except 5 is the minimum for 'Rest of the World'). The minimum number of responses to qualify for an individual country table is 10.

Ranking methodology entails respondents rating their counterparties using a scale of 1 to 7 (seven being excellent and one being unacceptable) across 43 separate service elements, grouped into 12 broad service categories, across securities services and treasury services. The service elements include technology, reporting, settlement, safekeeping, income collection, tax reclamation, securities lending, performance measurement, foreign exchange, cash management and fees.

R & M Surveys asked respondents to place the 12 service categories in order of importance. This ranking can be used to determine the importance of each bank's relative strengths and weaknesses.

In addition to analysing the results by geography, the survey considers different client types. Firstly, there is a focus on investment managers, with some distinction between direct relationships (i.e. those investment managers who appointed and pay for the custodian's services) and third party relationships (i.e. those investment managers acting for an institutional investor who appointed and pays the custodian). Secondly, the focus is on pension funds/foundations/charities/others.

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