Revenues from the London Stock Exchange Group’s (LSEG) post-trade services increased by over a third during the first half of the financial year, with global investors shifting their operations to meet central clearing requirements.
Overall revenues from LSEG’s post-trade businesses were £213.7m, an increase of 34% year-on-year. Of which, revenue from its wholly-owned LCH.Clearnet business accounted for £165.7m, up 49%. In addition its Italian-based clearing, settlement and custody businesses, CC&G and Monte Titoli, recorded revenue growth of 6% on a constant currency basis to £48m.
According to a statement from LSEG: “Revenue (from LCH.Clearnet) grew 49%, reflecting growth in both OTC and list products clearing.”
Revenue from OTC derivatives clearing rose 26% to £68.6m, while non-OTC products (such as listed derivatives, cash equities, commodities and fixed income) grew 31% to £85.4m.
As global regulators continue to roll-out rules on central clearing, revenues from LCH.Clearnet’s OTC derivatives clearing business reflects the global move of investors preparing for the incoming mandate.
However, LSEG expects revenues to decline from LCH in the second half due to the loss of cash collateral levels and commodity clearing revenues after the London Metal Exchange (LME) split from LCH to establish its own clearing house.
Following the full integration of LCH.Clearnet earlier this year, the LSEG plans to deliver £49m of cost reductions in 2015.
“Operating expenses have remained well controlled and we are seeing benefits of the cost reduction programme at LCH Clearnet,” says Xavier Rolet, CEO, LSEG.
LSEG’s Post-Trade Businesses Spurs 1H2014 Revenues
Revenues from the London Stock Exchange Group’s (LSEG) post-trade services increased by over a third during the first half of the financial year, with global investors shifting their operations to meet incoming central clearing requirements.
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