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Securities Lending Market Report | December 2022

EMEA

>>> Equities

After an initial decline in the European equity markets, H2 2022 was marked by a recovery for major stock exchanges Fig 1 - DataLend
in Q4. Overall, this resulted in effective securities lending and borrowing strategies with revenues of USD 644m for
H2 2022, which represented a drop of 24% compared to H1 and contributed to total revenues of USD 1.5bn across the European Equity Market
whole year for the region.
2.90 0.30
The end of 2022 presented positive signs regarding the The French government received approval from the 2.80
effectiveness of the Central Banks increase of interest regulators to nationalise EDF, which is now 90% government 0.25
rate campaigns, not only were they aligned to the market owned giving them more control over restructuring. This 2.70 0.20
expectations but they also halted inflation, even reducing stabilised initial concerns seen in Q1, which was reflected in 2.60
it for the month of December. This motivated the market the lending markets. Weighted average fees dropped from Lendable Value (Trillions $) 2.50 0.15 On-Loan Value (Trillions $)
to move away from the bearish outlook with major indices 135bps in H1, to 24bps during the second half of the year 2.40 0.10
regaining strength, the French CAC 40 for instance grew by for the name. 0.05
9.3% over the period and the German DAX by 8.9%. In the Industrials also provided significant revenue opportunities 2.30
lending markets, Germany and France continue to dominate for 2022 linked to supply and demand stresses, the sector 2.20 0.00
returns, albeit with the largest market share. Jul 2022 Aug 2022 Sep 2022 Oct 2022 Nov 2022 Dec 2022
generating revenues of USD 275m with weighted average
On the other hand, Sweden was perhaps the standout fees of 78bps for the year. Varta Ag (VAR1 GR) in Germany Group Lendable On-Loan Balance
performer, with revenues increasing 104% YoY (USD 220m). was a notable name among this sector and was the top
Samhallsbyggnadsbolaget i Norden AB (SBBB SS), which equity revenue earner across 2022, with revenues of more
operates as a real estate company remained a directional than USD 36m, USD 13.1m of which were generated in H2.
short. Volvo (VOCARB) saw a fall in operating profits for Q3, In the ETF space, while revenues are predominantly derived
while Embracer Group AB (EMBRAC SS) struggled in the from the US, European interest continues to be robust. Fig 2 - DataLend
Tech sector amid poor market news and a large selloff at the At year-end, Europe accounted for 11% of the total ETFs European Equity Market Cash vs Non-Cash
end of September. This made Sweden the highest revenue lending revenues and benefitted from 9.3% YoY revenue
generator for the month of October in EMEA markets.
growth, this represented 45m revenues for H2 2022 in 60.00 250.00
The ongoing conflict in Ukraine contributed to the pressure Europe. 50.00
on supply chains across Europe. Lending in these sectors 200.00
benefited from strong returns and stocks were trading 40.00 150.00
special in what was otherwise a relatively flat market, On-Loan vs Cash (Billions $) 30.00 On-Loan vs Non-Cash (Billions $)
presenting limited opportunities in the corporate action and 100.00
merger names for the second half of the year. In the energy 20.00
sector, TotalEnergies (TTE FP) generated H2 2022 lending 10.00 50.00
revenues of USD 45.4m, which made it the top regional 0.00 0.00
equity earner during the period with a weighted average fee Jul 2022 Aug 2022 Sep 2022 Oct 2022 Nov 2022 Dec 2022
of over 41bps and return to lendable of 10bps.
Group Balance vs Cash Group Balance vs Non-Cash