The global securities finance industry generated $2.34 billion in revenue for lenders in the third quarter of 2021, according to DataLend, the market data division of fintech EquiLend.
The figure represents a 33% increase from the $1.77 billion generated in Q3 2020. Revenue from equities increased by 34% year over year to $1.89 billion, driven by multiple corporate events (in particular, Naspers and Vivendi) and sustained borrow demand for SPACs and IPOs. Revenue generated from fixed income securities increased by 26% over the same time frame to $456 million.
In September 2021 alone, the global securities finance industry generated $790 million in revenue for lenders. The figure represents a month-over-month decrease of 1% from the $796 million generated for lenders in August 2021, and a significant 46% increase year over year from the $541 million generated in September 2020.
According to DataLend, the September year-over-year increase of 46% in lender-to-broker revenue was primarily driven by global equities, where the average fee increased from 55 to 71 basis points. The spin-off of Universal Music Group from French media conglomerate Vivendi was a significant driver of lending revenue.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $209 million in revenue in September, a 13% increase from 2020.
The top five earners in September 2021 were Vivendi (VIV FP), Robinhood Markets (HOOD), VMWare (VMW), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and WH Group (288 HK). The five securities in total generated over $107 million in revenue in the month.