US interest rates help Clearstream pull in end-of-year profit

Clearstream recorded an increase of 7.5% for total revenues at €718 million, driven by net income from its banking business. 

By Joe Parsons

Clearstream’s banking business helped the post-trade unit of Deutsche Boerse record a profit in 2018, despite the declines it recorded across custody and settlement.

Net interest income from its banking business reached €155.5 million at the end of the year, up nearly 50% in comparison to 2017. This helped Clearstream record an increase of 7.5% for total revenues at €718 million.

“Growth was driven by net interest income from the banking business… This increase can essentially be attributed to higher interest rates in the US,” Deutsche Boerse stated in its fourth quarter earnings release.

Revenues for Clearsteam’s investment fund services (IFS) unit, which provides global fund processing services, and collateral management businesses also posted an increase in revenues of 12% and 2% to €154.3 million and €83.1 million respectively.

However, custody revenues declined slightly by €2.3 million, while settlement revenues fell 4.4% to €76 million.

Throughout 2018, Clearstream rolled out a number of initiatives including its InvestorCSD model, which provides a single access point for banks to access the pan-European settlement platform, and completed the acquisition of the Swisscanto Funds Centre.

Clearstream also signed two sub-custody deals, one in Romania with Societe Gernerale Securities Services, and the other in Colombia with BNP Paribas Securities Services.