Europe’s ICSDs record bumper year following boost in custody and settlement businesses

ICSDs see annual revenue and assets under custody increases during 2019.

By Joe Parsons

Clearstream and Euroclear, Europe’s international central securities depositories (ICSDs), both saw growth in their custody and funds services businesses during 2019.

In the impressive results, Clearstream and Euroclear’s ICSD each reported an increase of 8% in their annual revenues to €1 billion and €1.4 billion respectively.

Revenues from Clearstream’s post-trade business was up 6.5% to €764 million, while its Investment Fund Services (IFS) division reported revenues of €183.1 million, up by over 18%. However, collateral management revenues dropped 6% to €78 million.

Meanwhile, Euroclear’s Belgium-based ICSD reported that its Collateral Highway mobilised an average of €1.3 trillion, up 6%, and its FundsPlace platform processed 11.2 million fund orders by asset managers and exchange traded fund (ETF) issuers, up 3%.

Assets under custody for both Clearstream and Euroclear increased 3% year-on-year to €14 trillion and €30.1 trillion respectively.

“Following an excellent performance in 2018, 2019 was another record year for Euroclear. By consistently implementing our strategy, we continue to grow our business through customer and product expansion and capture the benefit of positive market conditions,” said Lieve Moistry, CEO, Euroclear.

“Looking forward, despite headwinds from lower interest rates environment, we continue to invest in customer and product expansion, and to enhance our technology. By remaining focused on delivering our strategic objectives, we expect to create further value for all our stakeholders.”

Over the past 12 months, both firms have expanded their product capabilities but with different strategies.

Euroclear has focused on collateral management and ETF services, which include becoming a 100% owner of GlobalCollateral and increasing its ICSD ETF distribution network.

Clearstream has also been active in the fund distribution space, and also closed the acquisition of Swisscanto Funds Centre and the managed fund services business from National Bank of Australia.