Euroclear is shoring up its balance sheet at the expense of its shareholders, reflecting pressure from regulators to preserve cash to withstand the coronavirus downturn. It has also delayed approval of its dividend payment of €82 per share until the final quarter of the year after guidance from national and European central banks.
Euroclear has been exploring options for more of its small shareholders to cash out for some time after several banks sold their stakes to Intercontinental Exchange and the London Stock Exchange Group. But in a business and financial update, the board of Euroclear said it “has decided to stop all work on a tentative liquidity initiative, and wait until economic activity and market stability has been restored in a sustained way to consider the matter again”.
The utility’s moves were being watched by exchanges, private equity houses and banks after a wave of consolidation among market infrastructure operators in Europe. The top 20 shareholders collectively own 72% of Euroclear and the remaining 120 holders each own less than a 1% stake. Many are smaller European financial institutions that are a legacy of merger activity in the early 2000s