Securities lending revenue increased by 32% YOY in March 2022, finds DataLend

North American equities have been attributed by DataLend as the driver behind increased lender-to-broker revenue.

By Wesley Bray

EquiLend’s market data service DataLend has found that the global securities finance industry generated $2.17 billion in revenue for lenders in the first quarter of this year.

The figure represents a 5% increase from the $2.07 billion generated in the same time period last year.

The global securities finance industry generated $836 million in revenue for lenders in March 2022 alone, representing an impressive 32% increase year-over-year (YOY) compared to the $632 million generated in March last year.

The YOY increase in lender-to-broker revenue was mainly driven by North American equities, according to DataLend, where increased demand in SPACs, IPOs and high-yield corporate debt ETFs drove up the average fee to 61 bps, an increase by 30% over March 2021.

Elsewhere, equities revenue decreased by less than 1% YOY to $1.64 billion, while fixed income securities increased by 27% in the same time period to $534 million.

The revenue increase was largely attributed to corporate debt, where the average on-loan balances increased by 33% and the average fee by 59%.

Global broker-to-broker activity, which involves broker-dealers lending and borrowing securities from one another, saw an additional $251 million in revenue in March, a 1% increase from last year.

Amongst the top five earners in March 2022 were Lucid Group (LCID), Dutch Bros (BROS), Digital World Acquisition (DWAC), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and Rivian Automotive (RIVN), which generated $58 million in revenue in the month alone.