HNB recently launched its Custody and Trustee services business. The setting up of the Custody and Trustee business further strengthens HNB’s unparalleled product depth and service offering and is a testament of HNB’s commitment to continue providing world class banking solutions to its customers, the bank said in a statement. This unit will be headed by Tyrone Hannan, who brings with him a wealth of experience and track record of structuring solutions to expand the custody and trustee business in Sri Lanka.
Ruwan Manatunga, Deputy General Manager, Corporate Banking, commenting on the setting up of the Bank’s Custody and Trustee business said that HNB has always been in the forefront in developing new relationships with an eye on the future.
He was of the view that Sri Lanka is poised to develop further in financial services and that HNB is well positioned to be a major player in the capital market.
Tyrone Hannan said HNB can facilitate its large client base to have easy access to the capital market and to actively participate in IPOs and the corporate bonds market. Further, HNB is well positioned to also provide expertise in advisory and other services to the market players.
With the expected growth in the capital market, HNB as the first private commercial bank to enter the Custody and Trustee space is fully geared to support both local and international players, demanding exceptional services for their investments.
Manatunga and Hannan went on to further explain the concept of Custodian Banking and its benefits-
“The anticipated development in the country’s capital market is likely to increase the demand for custodian and trustee services. HNB aims to provide a ‘one stop shop’ for its customers to enjoy traditional banking services coupled with ease of entry into the capital markets”, explained Manatunga on HNB’s foray into these services.
Manatunga added that efforts are being made towards developing the corporate debt market.
“The new US$ board would be introduced shortly to facilitate the listings of foreign entities and the CSE is working towards the introduction of derivative trading. The introduction of the Central Counter Party (CCP) settlement system is also in the offing,” he revealed. “Timing is also perfect; the increase in per-capita income of the Country and the middle income bracket will enhance market demand for investment products such as unit trusts which will create greater demand for custodian and trustee services,” he disclosed.
HNB with is its 275 plus billion Corporate Banking portfolio, the largest amongst the local and foreign private commercial banks, offers its corporate and retail customers the full suite of product and services, covering working capital financing, international trade financing, project financing, payments and cash management services.
“The introduction of the Custodian and Trustee business further strengthens the Bank’s offering to its diversified customer base by providing value and convenience,” Hannan said.
Structured solutions together with world class customer experience at competitive pricing is the plan with the bank investing heavily in state of the art technology to keep pace with international Custodian and Trustee industry standards trends. HNB is positioning itself as the local player in the custody and trustee services space alongside foreign banks operating in the Country.
Over the recent years, there has been a marked increase in the demand for custodian services worldwide due to the added complexity in compliance and reporting requirements.
The stricter regulatory rules have compelled financial institutions to approach custody banks to take care of accounting, back-office and middle-office activities.
The resulting increase in the size of assets under custody for the world’s largest custodians has driven top line growth by boosting fee based revenues.
Multinational banks based in Sri Lanka enjoy almost the entire custodian market in Sri Lanka and the presence of local commercial banks in this business is negligible despite registered and having license to operate.
The custodian industry has seen increased competition in recent years, which has resulted in reduced margins and forced industry consolidation.
In order to compete in the custodian business, banks must have a portfolio size that creates economies of scale, and continually invest in systems and technology.
To conclude, both Ruwan Manatunga and Tyrone Hannan stressed that HNB will now play an important role in developing the Country’s capital market and will ensure that Sri Lanka’s profile in the international market space to attract foreign funds to the local market is maximized.
They also commented that the Bank’s unwavering commitment to its valued corporate and retail customers to provide a world class product depth and service offering and that this track record is reflected through the series of investments HNB has made in the recent years in human capital and state of the art technology.