BlackRock sees bumper Q1 securities lending revenue
21 April 2020 New York
Image: BjoernWylezich/Shutterstock.com
BlackRock’s securities lending revenue for the first quarter of 2020 increased by 6.8 percent year-over-year.
The asset manager's lending business achieved $158 million in earnings for Q1, compared to 148 million during the same period last year. This represents BlackRock’s best first-quarter revenue in several years.
Between 2013 – when the asset manager first started to report securities lending revenue individually from related services – and 2019, its average Q1 revenue was $132 million, with a low of $105 million in Q1 2014 and a high of $155 million in Q1 2018.
Earnings from securities lending in the last quarter were, however, down from the $169 million reported in Q4 2019.
BlackRock’s lending business performance is also reporting alongside revenue from investment advisory, administration fees. The group’s combined revenue was $3 billion, up from $2.8 billion in Q1 2019.
Overall revenue from fees for these services was also down compared to Q4 when the asset manager earned $3,089 million.
In its report for the quarter, BlackRock says the year-on-year growth for this services grouping was primarily driven by organic growth, the net positive impact of market beta and foreign exchange on average assets under management (AUM).
It adds that the earnings increase came despite the impact of recent market volatility, and the effect of one more day in the quarter, partially offset by strategic pricing changes to certain products.
Meanwhile, the quarter-to-quarter drop off was driven by the impact of lower average AUM related to recent market declines and the effect of one less day in the quarter, partially offset by the impact of organic growth, BlackRock adds.
Overall, BlackRock saw revenue increase 11 percent year-over-year driven by higher base fees and 34 percent growth in technology services revenue, reflecting the impact of the acquiring eFront, a financial services provider, and continued momentum in the growth of Aladdin, the flagship risk management platform managed by BlackRock Solutions.
The asset manager's lending business achieved $158 million in earnings for Q1, compared to 148 million during the same period last year. This represents BlackRock’s best first-quarter revenue in several years.
Between 2013 – when the asset manager first started to report securities lending revenue individually from related services – and 2019, its average Q1 revenue was $132 million, with a low of $105 million in Q1 2014 and a high of $155 million in Q1 2018.
Earnings from securities lending in the last quarter were, however, down from the $169 million reported in Q4 2019.
BlackRock’s lending business performance is also reporting alongside revenue from investment advisory, administration fees. The group’s combined revenue was $3 billion, up from $2.8 billion in Q1 2019.
Overall revenue from fees for these services was also down compared to Q4 when the asset manager earned $3,089 million.
In its report for the quarter, BlackRock says the year-on-year growth for this services grouping was primarily driven by organic growth, the net positive impact of market beta and foreign exchange on average assets under management (AUM).
It adds that the earnings increase came despite the impact of recent market volatility, and the effect of one more day in the quarter, partially offset by strategic pricing changes to certain products.
Meanwhile, the quarter-to-quarter drop off was driven by the impact of lower average AUM related to recent market declines and the effect of one less day in the quarter, partially offset by the impact of organic growth, BlackRock adds.
Overall, BlackRock saw revenue increase 11 percent year-over-year driven by higher base fees and 34 percent growth in technology services revenue, reflecting the impact of the acquiring eFront, a financial services provider, and continued momentum in the growth of Aladdin, the flagship risk management platform managed by BlackRock Solutions.
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