The 2008 business results for the Euroclear group of national and international central securities depositories (CSDs) were resilient. Against equity market capitalisation decreases of more than 45% in Belgium, France, Ireland, the Netherlands and the UK in 2008, the Euroclear group settled 157 million transactions worth approximately EUR 560 trillion in 2008, on par with 2007.
Euroclear also made good progress on delivering its strategic objectives, launching its platform to process all domestic and cross-border transactions involving Belgian, Dutch and French securities in January 2009, finalizing in October 2008 the acquisition of NCSD, covering the CSDs of Finland and Sweden, and announcing an agreement to purchase Xtrakter in early 2009.
“Euroclear proved very resilient in 2008, helping to bring safety and stability to the capital markets, precisely what is expected of a market infrastructure, particularly during periods of tremendous volatility,” says Pierre Francotte, chief executive officer of Euroclear SA/NV. “We have been leveraging our risk management expertise to offer our clients a safe haven for their securities business, now and in the difficult months ahead. Notwithstanding the impact of the financial crisis on securities values and the levels of client trading and settlement activity generally, Euroclear’s solid 2008 operational performance demonstrates our clients’ search for low risk and low cost post-trade solutions. Our focus in the coming months will be to further reduce their costs and risks.”
The entity-specific and combined results of the Euroclear group (including November and December 2008 figures for turnover and transactions settled, and the year-end 2008 value of securities held for Euroclear Finland and Euroclear Sweden, which became part of the group on 31 October 2008) are:
• Turnover, or the value of securities transactions settled, was largely stable at EUR 559.8 trillion compared to EUR 561.8 trillion in 2007.
• The number of netted transactions settled in the Euroclear group increased slightly to 157.3 million in 2008 compared with 155.6 million in 2007.
• The value of securities held for Euroclear clients at the end of 2008 was EUR 18.1 trillion, a 6% decrease from the EUR 19.2 trillion recorded at year-end 2007, driven mostly by lower equity and fund asset values in some of the CSD markets of the Euroclear group.
• The combined daily value of collateral provision outstanding in Euroclear Bank and Euroclear UK & Ireland experienced a 29% drop in 2008 to EUR 424.3 billion compared with EUR 595.0 billion at the end of 2007, largely due to deleveraging in the industry.
The results reported across the group for assets held in custody reflect the sharp erosion of securities values across asset classes, most predominantly in equities, as well as the market trend towards cash liquidity. At the same time, Euroclear benefited from the inclusion of Euroclear Finland and Euroclear Sweden, and from growth in fixed-income securities holdings.
The value of securities held in custody by Euroclear Bank was relatively flat in 2008 at EUR 9.1 trillion, compared to EUR 9.2 trillion recorded in 2007. At Euroclear France, the 2008 total value of securities held was EUR 4.5 trillion, a 15% decrease from 2007’s EUR 5.3 trillion.
Securities held for clients through Euroclear UK & Ireland dropped 10% in 2008 to GBP 2.3 trillion from GBP 2.6 trillion in 2007. The large swings in sterling/euro currency exchange rates in 2008 magnifies the decline when expressed in euro, i.e., 26% from EUR 3.5 trillion in 2007 to EUR 2.6 trillion in 2008.
The value of securities held in Euroclear Nederland fell to EUR 819 billion in 2008 compared to the EUR 945 billion recorded in 2007, a decrease of 13%. Last year, securities held by Euroclear Belgium declined by 29% to EUR 161 billion from EUR 228 billion in 2007.
Euroclear Finland recorded EUR 199 billion and Euroclear Sweden posted EUR 643 billion in the value of securities held in custody at year-end 2008.
For more details please visit http://www.euroclear.com/
D.C.