HNB unveils Custody, Trustee, Fund Accounting and Escrow services

HNB recently announced the launch of its Custody and Trustee services business, another first amongst the local private commercial banks in the country. 

The establishment of the Custody and Trustee business further strengthens HNB’s unparalleled product depth and service offering and is a testament to HNB’s commitment to continue providing world-class banking solutions to its customers. This unit will be headed by Tyrone Hannan, who brings with him a wealth of experience and a track record of structuring solutions to expand the custody and trustee business in Sri Lanka.

Corporate Banking Deputy General Manager Ruwan Manatunga, commenting on the setting up of the Bank’s Custody and Trustee business, said that HNB had always been at the forefront in developing new relationships with an eye on the future. He was of the view that Sri Lanka was poised to develop further in financial services and that HNB was well positioned to be a major player in the capital market.

Hannan articulated that with the launch of the Custody and Trustee services, 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, explaining the concept of Custodian Banking and its benefits, said: “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,” said Manatunga while speaking about HNB’s foray into these services.

Manatunga went on to add that efforts are being made to develop the corporate debt market. “The new US dollar board will 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.

 “The timing is also perfect. The increase in the 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.                                          

With is its 275-plus billion Corporate Banking portfolio, HNB, the largest amongst local and foreign private commercial banks, offers its corporate and retail customers the full suite of products 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,” said Hannan. 

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 Custodian and Trustee services space alongside foreign banks operating in the country.

Over 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 being registered and having a 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. 

Both Manatunga and Hannan stressed that HNB would now play an important role in developing the country’s capital market and would ensure that Sri Lanka’s profile in the international market space to attract foreign funds to the local market was maximised. 

Furthermore, they reiterated 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 recent years in human capital and state-of-the-art technology.