Deutsche Boerse Sees Increased Revenue from Collateral

Deutsche Boerse saw revenues from clearing and collateral management across the Group in the first half of the year, particularly with its securities financing business.

Deutsche Boerse’s post-trade unit, Clearstream, recorded net revenues of €17.4 million in its Global Securities Financing business, up 9% year-on-year.

The business was significantly boosted with the securities lending mandate from the Italian and German national central bank, under Europe’s Public Sector Purchase Programme (PSPP).

Furthermore, the Frankfurt-based exchange group saw net interest income increase in its clearing house, Eurex Clearing, due to investment in its client’s cash collateral, and a levy of 10 basis points on cash collateral.

However, in the second quarter average outstanding volume on Eurex Repo, its marketplace for the collateralised money market as well as for the GC Pooling offering, declined by 7% to €188.6 billion. This was due to market participants withdrawing bonds as collateral for repo transactions, given the low interest rate environment and the European Central Bank’s bond-buying programme.

Deutsche Boerse also increased investment in Clearstream (€35.1 million) and its derivatives exchange Eurex (€28.3 million), in order to expand its settlement and collateral management systems, as well as its trading and clearing systems.

“Our new medium-term plan focusses more strongly on the scalability of our business model – primarily through expected revenue growth of up to 10 per cent per annum until 2018. In addition, structural efficiency gains will take full effect by the end of 2016, in order to ensure that our earnings targets are achieved,” says Carsten Kengeter, CEO, Deutsche Börse.