The global securities lending industry generated $9.28 billion in revenue for lenders in 2021, according to DataLend, the market data division of fintech EquiLend.
The figure represents a 21.2% increase from the $7.66 billion generated for lenders in 2020 and a 7.2% increase over the $8.66 billion in 2019. Last year was the highest year for lending revenue since 2018, which had just under $10 billion in revenue.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $2.82 billion in revenue in 2021, a 1.7% decrease year over year.
Securities lending revenue is calculated as the amount paid by borrowers, typically broker-dealers on behalf of their hedge fund clients, to temporarily borrow equity and fixed income securities from long-holders of these assets, known as beneficial owners.
According to DataLend, the increase in lender-to-broker revenue was experienced across equity markets globally: Americas (+22.3%), EMEA (+1%) and APAC (+29.7%). Fixed income markets also experienced notable increases with lending revenue from corporate debt up 36.4% and government debt up 27.9% relative to 2020.
The top five revenue-generating securities in the global securities lending markets in 2021 were Robinhood Markets (HOOD), iShares iBoxx $ High Yield Corporate Bond ETF (HYG), Blink Charging (BLNK), VMware (VMW) and Visa (V), which together generated $413 million in lending revenue in 2021.