Revenue from Clearstream’s custody business rose 10% in the third quarter to €90.9 million, boosting overall earnings on the Deutsche Boerse-owned venture.
During the quarter Clearstream registered a 9% increase in net revenue to €175.1 million, which correlated to the increase in assets under custody and an increase in settlement volumes.
The average value of assets under custody increased 5% to €12.2 trillion, and the number of settlement transactions processed by Clearstream increased 2% to 29.8 million, of which international settlement activity, mostly off-exchange OTC transactions, rose 5% to 10.3 million.
Settlement revenue increased 1.4% to €29.2 million, while earnings from global securities financing, which includes triparty repo, securities lending and collateral management, grew 7% to reach €16.1 million.
Earlier this month a Clearstream executive attributed the increase in custody and settlement volumes during the quarter to people preparing for incoming regulations.
“Various regulations are about to enter into force over the coming months and all market participants are now entering an intense preparatory phase during which they will have to make some significant investment decisions,” said Philip Brown, head of global client relations, Clearstream.
With increased margin and clearing requirements set out in the European Markets Infrastructure Regime (EMIR), collateral mobilization has become a key priority for firms in order to meet the new rules.
Furthermore with the migration of securities settlements to T+2, firms are increasingly turning to settlement and clearing providers in order to carry on doing business.
Clearstream reported the second highest earnings for Deutsche Boerse after Eurex, its derivatives business, declared a 13% increase in revenues to €190.5 million as a result of increased trading volumes and an additional €15.9 million of transaction fees and revenue from its energy platform, the European Energy Exchange (EEX), which became fully integrated into Eurex earlier this year.
Custody Revenue at Clearstream Jumps in Q3
Revenue from Clearstream’s custody business rose 10% in the third quarter to €90.9 million, boosting overall earnings on the Deutsche Boerse-owned venture.