The global securities finance industry generated $821 million in revenue for lenders in October 2021, according to DataLend, the market data division of fintech EquiLend. The figure represents a 4% increase from the $790 million generated for lenders in September 2021. There was a 34% increase year over year from the $615 million generated in October 2020.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $225 million in revenue in October, a 20% increase from 2020.
According to DataLend, the increase in lender-to-broker revenue over 2020 was driven by an increase in fees in Asia and balances in North America. The average fee for Asian equities increased by over 27 basis points (bps) to 105 bps, while the average on-loan value in North America increased by 23% compared to the prior year.
For fixed income securities, global revenue generated from government debt saw a 31% increase, while corporate debt increased 81%. Both increases in revenue were mainly driven by rises in average on-loan value of 21% and 47%, respectively. The average fee for corporate debt also increased by 24%, from 17 bps in October 2020 to 21 bps last month.
The top five lending revenue-generating securities in October 2021 were Robinhood Markets (HOOD), VMware (VMW), Ginkgo Bioworks (DNA), Faraday Future (FFIE) and Microvast (MVST). The five securities in total generated over $105 million in revenue in the month.