The global securities finance industry generated $703 million in revenue for lenders in January 2022, according to DataLend, the market data division of fintech EquiLend.
The figure represents a 6% decrease from the $749 million generated for lenders in December 2021 and a 12% decrease year over year from the $803 million generated in January 2021. Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $191 million in revenue in January 2022, a 32% decrease from 2021.
According to DataLend, the notable decrease in lender-to-broker revenue over 2021 was driven by equities in EMEA (Europe, Middle East, Africa) and North America, where the average fee decreased by 31% and 30% year over year, respectively.
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 late January 2021.
In the fixed income lending market, global revenue generated from government debt saw a 13% increase to $140 million, while corporate debt saw an increase of 117% year over year to $49 million. The increase in corporate debt revenue was driven by on-loan values and fees rising by 32% and 59%, 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 $83 million in revenue in the month.