BlackRock boosts securities lending revenue in 2019
16 January 2020 New York
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BlackRock’s securities lending revenue increased by 31 percent in Q4 2019, compared to the same period in 2018.
The bank’s lending revenue hit $169 million in the three months prior to year-end, up from $129 million during Q4 2018.
In its earnings report, BlackRock says the revenue up-tick reflected higher lending spreads and higher average balances of securities on loan.
Meanwhile, revenue from securities lending combined with investment advisory and administration fees increased from $2,779 million in Q4 2018 to $3,089 million over Q4 last year.
Of this, BlackRock said its revenue growth for this cluster of services was mainly driven by the positive impact of market beta, organic growth and higher securities lending revenue, partially offset by strategic pricing changes to certain products.
Further highlights from BlackRock’s report found that there was $429 billion of full-year total net inflows, reflecting 7 percent organic asset growth and 5 percent organic base fee growth.
This growth was led by strong fixed income and cash flows and record activity in illiquid alternatives, according to BlackRock.
Elsewhere, the report notes that full-year overall revenue increased by 2 percent, which was driven by higher base fees and 24 percent growth in technology services revenue, demonstrating continued momentum of Aladdin, the bank’s operating system for investment professionals that is relied on by approximately 55,000 investment professionals, along with the impact of the acquisition eFront, a financial services firm.
In a statement on the earnings report, Laurence Fink, chairman and CEO of BlackRock, says the results reflect the systematic investments the bank has made to build “broader and deeper client relationships and meet their evolving needs”.
“Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology,” he adds.
According to BlackRock, Aladdin is relied on by approximately 55,000 investment professionals around the world.
The bank’s lending revenue hit $169 million in the three months prior to year-end, up from $129 million during Q4 2018.
In its earnings report, BlackRock says the revenue up-tick reflected higher lending spreads and higher average balances of securities on loan.
Meanwhile, revenue from securities lending combined with investment advisory and administration fees increased from $2,779 million in Q4 2018 to $3,089 million over Q4 last year.
Of this, BlackRock said its revenue growth for this cluster of services was mainly driven by the positive impact of market beta, organic growth and higher securities lending revenue, partially offset by strategic pricing changes to certain products.
Further highlights from BlackRock’s report found that there was $429 billion of full-year total net inflows, reflecting 7 percent organic asset growth and 5 percent organic base fee growth.
This growth was led by strong fixed income and cash flows and record activity in illiquid alternatives, according to BlackRock.
Elsewhere, the report notes that full-year overall revenue increased by 2 percent, which was driven by higher base fees and 24 percent growth in technology services revenue, demonstrating continued momentum of Aladdin, the bank’s operating system for investment professionals that is relied on by approximately 55,000 investment professionals, along with the impact of the acquisition eFront, a financial services firm.
In a statement on the earnings report, Laurence Fink, chairman and CEO of BlackRock, says the results reflect the systematic investments the bank has made to build “broader and deeper client relationships and meet their evolving needs”.
“Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology,” he adds.
According to BlackRock, Aladdin is relied on by approximately 55,000 investment professionals around the world.
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