S&P Global: 2022 securities finance revenues hit $12.5bn

Securities finance revenues finished 2022 on a high, generating $1.044 billion during December (+4% when compared with November and +20% year-on-year). Despite balances being 6% lower yoy (-1% month-on-month), average fees increased 27% yoy (+0.5% mom) and average utilization increased 5% yoy (-2% mom).

Full year revenues for 2022 benefitted from the strong returns that were generated throughout Q4 2022, $3.034 billion (+12.1% when compared with 2021). $12.521 billion was generated over the course of the year which is an increase of 14.8% on 2021 and 34% on 2020. 2022 was the best year for securities finance revenues since the global financial crisis in 2008 ($13.2 billion).

Revenues across most asset classes increased when compared yoy. Both Americas (+42%) and EMEA (+35%) equities saw impressive growth in revenues along with government (+27%) and corporate bonds (+58%). December was a strong month for fixed income assets as both corporate and government bonds had their best performing month of the year during December ($98.64 million and $191.88 million respectively). ADRs (-26%) experienced a decline, which is a trend that has been witnessed throughout 2022, along with ETPs and Asian equities.

Average fees remained elevated when compared YoY across all asset classes with a strong 27% yoy increase. Average fees were higher for every month of the year when compared with 2021 and the year average was 5bps higher in 2022 when compared with 2021. The 2022 average fee was 45bps (Q1 38bps, Q2 46bps, Q3 48bps Q4 46bps).

As can be expected with the decline in asset valuations during the month, on loan balances declined both month-on-month (-1%) and year-on-year (-6%). The only asset class seeing an increase in the value of stock on loan (+15% YoY) was EMEA equities. Average balances for all securities peaked in Q2 in 2022 and fell steadily throughout the year (Q1 $2.91 billion, Q2 $2.921 billion, Q3 $2.766 billion, Q4 $2.63 billion).

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