Global securities lending revenue drops 12% YoY for January, says DataLend
03 February 2022 US
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The global securities finance industry generated US$703 million in revenue for lenders in January 2022, according to DataLend. This represented a 6 per cent contraction from December 2021 and a 12 per cent decrease year-on-year.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional US$191 million in revenue in January 2022, a 32 per cent decrease from January 2021.
According to DataLend, the decrease in lender-to-broker revenue over 2021 was driven by equities in Europe, the Middle East, Africa and North America, where the average fee decreased by 31 per cent from December 2021 and 30 per cent YoY.
January 2021 was an especially active month for the securities lending market, attributed to the market-wide meme stock frenzy as well as anticipation of the DuPont and International Fragrances and Flavors exchange offer, which bolstered revenue.
In the fixed income lending market, global revenue generated from government debt saw a 13 per cent increase to US$140 million, while corporate debt saw an increase of 117 per cent YoY to US$49 million.
The increase in corporate debt revenue was driven by on-loan values and fees rising by 32 per cent and 59 per cent, respectively.
The top five earners in January 2022 were Lucid Group (LCID), Digital World Acquisition Corp (DWAC), BHP Group (BHP AU), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and Krafton (259960 KS). The five securities in total generated over US$83 million in revenue in the month.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional US$191 million in revenue in January 2022, a 32 per cent decrease from January 2021.
According to DataLend, the decrease in lender-to-broker revenue over 2021 was driven by equities in Europe, the Middle East, Africa and North America, where the average fee decreased by 31 per cent from December 2021 and 30 per cent YoY.
January 2021 was an especially active month for the securities lending market, attributed to the market-wide meme stock frenzy as well as anticipation of the DuPont and International Fragrances and Flavors exchange offer, which bolstered revenue.
In the fixed income lending market, global revenue generated from government debt saw a 13 per cent increase to US$140 million, while corporate debt saw an increase of 117 per cent YoY to US$49 million.
The increase in corporate debt revenue was driven by on-loan values and fees rising by 32 per cent and 59 per cent, respectively.
The top five earners in January 2022 were Lucid Group (LCID), Digital World Acquisition Corp (DWAC), BHP Group (BHP AU), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and Krafton (259960 KS). The five securities in total generated over US$83 million in revenue in the month.
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OCC securities lending average daily loan value rises 24% YoY for January
OCC securities lending average daily loan value rises 24% YoY for January
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