Securities lending revenues face 20% decline YoY for Q1 2024
02 April 2024 US
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Securities lending revenues declined by 20 per cent year-on-year to US$2,748 million for Q1 2024, according to S&P Global Market Intelligence data.
A YoY fall in revenues was seen across all asset classes, with EMEA equities noting the largest decline of 40 per cent YoY to US$225 million.
During the month of March, securities lending revenues generated US$1,056 million, representing a 15 per cent YoY decline.
S&P Global Market Intelligence data has recorded US$795 million in revenues for the lending of equities in March, with fixed income assets generating US$254 million in revenues.
According to the data, all asset classes experienced a decline when compared with March 2023, except for government bond revenues which increased by 2 per cent YoY.
Commenting on the results, Matthew Chessum, director of securities finance at S&P Global Market Intelligence, says: “A year-on-year decline in both monthly and quarterly revenues is to be expected given the banner returns that were generated throughout 2024.
“March did mark the first month of the year where monthly revenues surpassed the US$1 billion mark however. This is a positive trend for market participants heading into the new quarter.”
He notes that short loan value remained low across all regions during Q1 2024, but has shown signs of increasing over the last few weeks — which could signify that a shift in market sentiment is taking place as equity markets “continue to reach all-time highs”.
Chessum concludes: “If volatility does start to increase as markets continue to march higher, securities lending revenues are likely to see a strong recovery.”
A YoY fall in revenues was seen across all asset classes, with EMEA equities noting the largest decline of 40 per cent YoY to US$225 million.
During the month of March, securities lending revenues generated US$1,056 million, representing a 15 per cent YoY decline.
S&P Global Market Intelligence data has recorded US$795 million in revenues for the lending of equities in March, with fixed income assets generating US$254 million in revenues.
According to the data, all asset classes experienced a decline when compared with March 2023, except for government bond revenues which increased by 2 per cent YoY.
Commenting on the results, Matthew Chessum, director of securities finance at S&P Global Market Intelligence, says: “A year-on-year decline in both monthly and quarterly revenues is to be expected given the banner returns that were generated throughout 2024.
“March did mark the first month of the year where monthly revenues surpassed the US$1 billion mark however. This is a positive trend for market participants heading into the new quarter.”
He notes that short loan value remained low across all regions during Q1 2024, but has shown signs of increasing over the last few weeks — which could signify that a shift in market sentiment is taking place as equity markets “continue to reach all-time highs”.
Chessum concludes: “If volatility does start to increase as markets continue to march higher, securities lending revenues are likely to see a strong recovery.”
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