Global Custody Pro - 2 May 2025

Records at HKEX & Deutsche Börse, ISSA New CEO, Kraken US Launch, HSBC Q1 & More Inside...

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Global Custody Pro
May 01, 2025 • Reading Time: 10 minutes

📰 Welcome to the Newsletter

Welcome to Global Custody Pro! I'm Brennan McDonald, Managing Editor. I write about the global custody industry after 12+ years in financial services, including working at a global custodian. The audio version of this newsletter is read by an AI voice. Have feedback? Just reply to this email or connect with us on LinkedIn.

Table of Contents

📠 Editor’s Comment

This week more earnings results came in for Q1 2025, so today’s newsletter is a bit longer than normal - you can reply to this email with your feedback or any global custody news tips.

🌏 Global Custody News

HKEX Posts Record Q1 Profit

  • Hong Kong Exchanges and Clearing (HKEX) reported record quarterly revenue and other income of HK$6.9 billion (+32% YoY) and record profit attributable to shareholders of HK$4.1 billion (+37% YoY) for Q1 2025. Performance was driven by record headline Average Daily Turnover (ADT) in the Cash Market (HK$242.7b, +144% YoY), record Derivatives Average Daily Volume (ADV) (1.9m contracts, +24% YoY), and significantly higher Stock Connect turnover (Northbound ADT +44% YoY, record Southbound ADT +255% YoY).  

  • The surge in trading volumes, particularly through the Connect programs which generated HK$942m revenue (+61% YoY), signals increased operational flows for custody, clearing, and settlement providers servicing Hong Kong and Mainland China access. HKEX's strategic initiatives, including accepting China Government Bonds as collateral for Swap Connect and OTC Clear and signing an MOU with HKMA's CMU OmniClear to enhance post-trade infrastructure, aim to support this activity and deepen Renminbi internationalisation.  

  • HKEX states its technology for Cash market clearing and settlement will be T+1 ready by end-2025. The exchange plans implementation of a streamlined settlement fee structure (effective June 2025), will publish a white paper on the appropriate settlement cycle for Hong Kong, and commence multi-year phased post-trade service enhancements in the coming months. The LME also launched its new LMEselect v10 trading platform in March 2025.

Deutsche Börse Record Custody, Settlement Volumes

In Fund Services and Securities Services, we have seen new all-time highs, both in custody and settlement, which resulted in double-digit net revenue growth without the treasury results. This was driven by three key factors. Firstly, there was continued growth in debt outstanding. Secondly, there was higher equity market levels. And thirdly, there were inflows into European equities, as I alluded before.

CEO Stephan Leithner on Deutsche Borse’s earnings call this week

  • Deutsche Börse Group reported Q1 2025 net revenue (excluding treasury result) increased 10% year-on-year to €1,507 million, slightly exceeding initial expectations, while corresponding EBITDA grew 11% to €912 million. Continued underlying growth was supported by increased market volatility since March.  

  • Fund Services and Securities Services benefited from record levels in assets under custody and settlement transactions, attributed to continued growth of debt outstanding, equity market levels, and inflows into European products. Securities Services saw assets under custody reach €16,028 billion (+9%) and settlement transactions hit 27.9 million (+25%), while Fund Services AuC reached €4,107 billion (+17%).  

Societe Generale Securities Services Reports

  • Societe Generale Securities Services revenues reached EUR 163 million in Q1 2025, a 1.4% increase compared to Q1 2024, with Assets under Custody at EUR 5,194 billion and Assets under Administration at EUR 637 billion.

  • Fee levels were reported as good compared to a high Q1 2024, attributed notably to strong commercial performance in fund distribution within the division.

Crédit Agricole Asset Servicing Revenue, AuC Rise

  • Crédit Agricole's Asset Servicing division CACEIS’ revenues increased by 2.7% year-on-year to €522 million in Q1 2025, attributed to favourable net interest margin evolution and higher fee income from flows and transactions, offsetting planned ISB customer exits. Assets under custody (AuC) reached €5,467 billion (up 9.0% YoY) and assets under administration (AuA) hit €3,575 billion (up 4.7% YoY) at end-March 2025.

JPX FY2024 Net Income Rises Slightly

  • Japan Exchange Group (JPX) reported a 0.4% year-on-year increase in net income attributable to owners of the parent company for the fiscal year ending March 31, 2025, reaching JPY 61.09 billion, despite higher operating expenses. Operating revenue grew 6.1% to JPY 162.23 billion, driven primarily by a 14.1% rise in average daily trading value for cash equities. JPX will pay a special dividend of JPY 10 per share on top of an ordinary dividend of JPY 35.5 per share for FY2024.  

ISSA appoints McKenny CEO, makes role full-time

  • The International Securities Services Association (ISSA) has appointed Julia McKenny as its Chief Executive Officer, effective 16 June 2025. She replaces the retiring Colin Parry and takes on the position as a newly established full-time role. McKenny possesses Australian legal qualifications, having been admitted as a Barrister and Solicitor in New South Wales, and has extensive securities services experience from roles at JP Morgan, Northern Trust, State Street, Standard Chartered, TMF Group, Accenture, and Morgan Stanley. 

Synergy launches Settlement Netting for EMEA repo

  • AccessFintech's Synergy network has launched Settlement Netting, initially piloting the programme in the €15 trillion EMEA repo market, aiming to enhance operational efficiency in fixed income. J.P. Morgan and Citi were involved in establishing the service, alongside an industry working group that helped design the data model and operational workflow.

BMV expands Nasdaq partnership

  • Grupo BMV signed an agreement with Nasdaq to modernise its post-trade infrastructure, transitioning from legacy in-house clearing and settlement platforms to Nasdaq's technology, and is now exploring a service-based delivery model developed by Nasdaq and Amazon Web Services (AWS). Jorge Alegría, CEO of Grupo BMV, stated, "Our post-trade technology infrastructure is undergoing a transformative evolution, with Nasdaq playing a pivotal role as our enabling partner, as we look toward the next decade."

HSBC 1Q25 Profit Lower

  • HSBC Holdings reported a 1Q25 profit before tax of US$9.5 billion, a US$3.2 billion decrease compared to 1Q24, primarily attributed to the non-recurrence of significant net gains from the 2024 disposals of its Canadian banking business and Argentinian operations. However, constant currency profit before tax excluding notable items rose by US$1.0 billion to US$9.8 billion, driven by strong results in Wealth (within IWPB and Hong Kong segments) and in Foreign Exchange, Debt and Equity Markets (within the CIB segment).  

CDS Finalises TCS BaNCS Upgrade

  • The Canadian Depository for Securities Limited (CDS), TMX Group's subsidiary, implemented significant upgrades to its core clearing technology this week under its post trade modernisation (PTM) initiative, replacing legacy systems for clearing, settlement, depository, and entitlement payments with the TCS BaNCS for Market Infrastructure platform.

  • The upgrades represent a key investment aimed at ensuring critical systems are "efficient, resilient and adaptive," advancing core technology capability and strengthening Canada's competitive position for global investment, according to John McKenzie, CEO, TMX Group.

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🚀 Digital Asset News

Kraken Launches US Securities Trading

  • Kraken now provides access to US securities, specifically over 11,000 stocks and ETFs, for its clients residing in the US, facilitated through a strategic partnership with API brokerage platform Alpaca. This expands Kraken's platform, which already includes over 300 digital assets and 6 fiat currencies.

  • This development aims to bridge digital and traditional assets, furthering Kraken's stated positioning as an institutional-grade, multi-asset-class trading platform by consolidating diverse asset types within a single interface. "This collaboration accelerates Kraken’s vision of combining traditional and digital asset classes into one platform," according to Nick LaMaina, Managing Director of Kraken.

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