S&P GMI: securities finance revenues reach $1.2bn, up 6.3% yoy in May

  • Securities finance revenues continue to trend above 2022 averages
  • Balances decline as short covering takes hold
  • Americas equities continue to perform well but specials revenues decline
  • Fixed income assets continue their strong performance

Securities finance revenues for the month of May reached $1.234 billion. This represents a 6.3% increase year-over-year (yoy), and 23% increase on May 2021 and 52% increase on May 2020. Month-on-month, that’s a 4% decrease. Americas equities and fixed income assets continued to produce strong returns.

Utilization decreased across all asset classes yoy as balances also declined yoy. Average fees were higher across all asset classes apart from ETPs and Asia equity. Average fees increased 40% yoy across government bonds and 36% yoy across corporate bonds leading to fees of 19bps and 45bps respectively. Specials activity across the Americas continued to push average fees higher (+23% yoy) to an impressive 85bps (down from 95bps during April).

The month of May was another busy month regarding economic news. The market volatility experienced throughout April continued for a good period of the month as the uncertainty regarding the demise of First Republic Bank sent further shock waves through financial markets. First Republic Bank subsequently became the fourth regional US lender to collapse since early March and the second-biggest bank failure in US history.

Around the globe inflation figures started to moderate and artificial intelligence came to the fore of market events. Technology stocks rallied and the Nasdaq finished the month 31% higher when compared to January. This led to a high degree of short covering across the market. The possibility of the US government defaulting on its national debt, as difficult discussions in relation to the debt ceiling continued, also made financial markets very choppy throughout the last few weeks of the month.

Read the full snapshot

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