NAB Asset Servicing has won a tender for the outsourcing of more than $20 billion of backoffice custody and administration by Suncorp Life, including the old Asteron business, and will proceed with a “lift and shift” of the Sydney-based operation. The tender, administered by PwC, came down to two competing outsource models.
NAB will uplift 14 staff of the estimated 40 currently working in the business. Suncorp staff were told the news last week and NAB staff will be told today. The transition should be relatively seamless because both custodians use DST’s HiPortfolio system and are linked up through Austraclear and CHESS.
Neither side in the deal wanted to discuss details last week. However, in a prepared statement issued on request, a Suncorp Life spokesperson said:
“Suncorp and NAB are extending their partnership relationship to include all custody and investment administration services. Previously, NAB has only provided international custody and investment administration services for Suncorp. Partnering, where it makes sense to do so, is part of Suncorp’s simplification strategy to create a simple and scalable business.
“Partnering with NAB gives Suncorp access to the capability of Australia’s largest custodian, with a reputation for excellence in custody and investment administration services.”
It is understood the final shortlist, consisting of NAB and State Street, involved different outsourcing models. NAB proposed the “lift and shift”, which is more like an acquisition, while State Street proposed a traditional outsource partnering role whereby Suncorp would continue to oversee the business, albeit from a high level.
Suncorp Life’s custody and administration was boosted in 2007 when the company became Australia’s largest insurer through the purchase of Promina. It had already acquired GIO a few years earlier. Promina’s brands included that of one of Australia’s oldest insurers, Asteron, which dates back to the 1840s.
A precise figure on the assets involved in the deal is not known but believed to be between $20-25 billion.
NAB Asset Servicing recently streamlined its relationship management team in Sydney and Melbourne with 10 redundancies. Some of these may be relocated within the bank.