The bank reached the figure of €202,000 million of equity on deposit in 2022 and has extended its service offering to broaden the Securities Services value chain.
José María Méndez, CEO of Cecabank.
The bank has three lines of business: Payments, Treasury Management and Securities Services. The latter includes all post-trading services for marketable securities and financial instruments such as depositary, registry, custody, execution, clearing and settlement services. At the close of 2022, Cecabank had €275,376 million of assets under custody and reached the figure of €202,000 million of equity on deposit, consolidating its position of leadership in Spain. José María Méndez, CEO of Cecabank, acknowledges that they are "very happy" with these figures.
According to the executive, the bank has adopted a series of measures to try to "broaden the Securities Services value chain and build customer loyalty". Examples of this are vote transmission, tax or reporting services.
"Custody and depositary fees are very low, which is why it is important to have critical mass and economies of scale. This is where technology is crucial. But it is also important to complement the value chain with other additional solutions that can be provided to fund managers to increase their efficiency and service quality", he adds.
Looking forward, Méndez points to three growth drivers for the bank: digital assets, ESG and regulation. In the meantime, the firm has invested heavily in technological innovation projects to offer more features to its customers. During the past year, Cecabank has embarked on 19 technology transformation initiatives as part of the 2022-2025 Technology Plan, geared towards boosting the business and enhancing operational resilience. "To achieve our goals, we need to continue to invest in talent and technology", explains Cecabank's CEO.
Challenges and adaptation
The executive does not rule out venturing outside Spain. "We are exploring the possibilities of approaching Luxembourg. It is an important European Union hub for attracting investors. Our role will be to accompany our customers as a depositary when they decide to register their investment funds there", he explains.
In recent years, the bank has experienced strong growth in Venture Capital Funds (VCF) and Venture Capital Companies (VCC). "We have also grown in this type of vehicle, which entails adaptation challenges for the depositary in terms of monitoring timeframes and the calculation of the net asset value in illiquid assets because there are new verification and usability tasks, among other issues", he argues.
The bank is also working on a proof of concept with a customer for the custody of digital assets. This involves a pilot test on a tokenised digital asset and on the custody of cryptocurrencies. "We want to learn and be prepared for when the customer wants to market this type of product", he says.
Méndez is committed to the separation of the depositary and the fund manager. "We are a neutral and independent depositary. Neutral because we do not manage the funds, we only provide depositary and custodian services; and independent because we do not market any products to retail customers. We do not have a retail distribution network, and we believe this reinforces the trust and oversight that we can provide to fund managers", he concludes.
