2024 Securities Lending Revenue Analysis: Key Insights

Overview of 2024 Securities Lending Revenue

The global securities lending landscape experienced notable shifts in 2024, reflecting a variety of economic factors and market dynamics. According to recent findings, the securities finance industry generated an impressive $9.64 billion in lending revenue for the year. This figure marks a decline of approximately 10.3% compared to the previous year's total of $10.74 billion, highlighting the increasingly competitive environment of securities lending.

Factors Influencing Revenue Decline

Several factors contributed to the decrease in lending revenues. Initially, the overall market saw a downturn, exacerbated by record-high indices that placed additional pressure on equity lending activities. Broker-to-broker lending activity also saw a drop, totaling $2.57 billion, reflecting a 9.9% decline from the preceding year.

Equity Lending Trends

In the equity lending sector, revenues fell sharply by 13% on a global scale. Specific areas of concern included North America, where revenue experienced a significant decline of 15%. The primary issue was influenced by a staggering 19% decrease in average fees. In Europe, the Middle East, and Africa (EMEA), revenue dropped by 24%, with both fees and balances decreasing by 16% and 11%, respectively. Interestingly, the Asia-Pacific (APAC) region's equity lending revenues remained relatively stable when compared to 2023.

Performance of Global Sovereign Debt

Amidst the challenges in equity lending, global sovereign debt revenue recorded an increase of 8% from the previous year, largely attributed to the robust performance of U.S. treasuries. These securities saw a remarkable growth of 16% year-over-year, underpinned by a 14% increase in balances. This growth indicates that despite the challenges in other areas, sovereign securities continue to attract considerable interest from lenders.

Corporate Debt Lending Insights

Conversely, the corporate debt segment faced a steeper decline, with revenue plummeting by 21%. This downturn represents a regression from the record highs achieved in 2023. The primary driver of this decline was a sharp 29% drop in fees, which significantly impacted revenue generation.

Top Earning Securities in 2024

The top five performing securities in the lending sphere for 2024 included Sirius XM Holdings, Lucid Group, Beyond Meat Inc., Tempus AI Inc., and Trump Media & Technology Group. Collectively, these securities generated roughly $644 million for lenders throughout the year, which is markedly lower than the $1.11 billion generated by the top five earners in the previous year. This stark contrast illustrates the shifts in market dynamics and the challenges faced by many companies in the securities lending space.

About DataLend and EquiLend

DataLend operates as the market data service under EquiLend's Data & Analytics Solutions group, rigorously tracking market movements across over 200,000 securities. Their impressive portfolio covers a staggering $35 trillion in lendable assets and $2.6 trillion in on-loan assets, effectively positioning them at the forefront of the securities finance market.

EquiLend, the parent company of DataLend, is recognized as a leading financial technology firm that offers an extensive range of services, encompassing Trading, Post-Trade, Data & Analytics, and RegTech solutions tailored to the securities finance industry. With global operations spanning North America, EMEA, and Asia-Pacific, EquiLend is well-integrated into the regulatory frameworks of various jurisdictions, allowing them to effectively service their clients across the spectrum.

Frequently Asked Questions

What is the total revenue generated by the securities lending industry in 2024?

In 2024, the global securities lending industry generated approximately $9.64 billion in revenue.

What factors contributed to the decrease in equity lending revenues?

The decline in equity lending revenues was primarily due to a 19% decrease in average fees in North America and a significant drop in fees and balances in EMEA.

Which sector saw revenue growth in 2024?

The global sovereign debt sector witnessed an 8% increase in revenue, largely driven by strong U.S. treasury performance.

How did corporate debt earnings fare in 2024?

Corporate debt earnings faced a substantial decline of 21%, primarily due to a significant drop in fees.

Who were the top earning securities in 2024?

The top earning securities included Sirius XM Holdings, Lucid Group, and Beyond Meat, which together generated around $644 million for lenders.

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