DataLend: Securities Lending Revenue Increased 33% YoY in Q3 2021
$2.34 Billion in Revenue Generated in Third Quarter
October 1, 2021
The global securities finance industry generated $2.34 billion in revenue for lenders in the third quarter of 2021, according to DataLend, the market data division of fintech EquiLend.
The figure represents a 33% increase from the $1.77 billion generated in Q3 2020. Revenue from equities increased by 34% year over year to $1.89 billion, driven by multiple corporate events (in particular, Naspers and Vivendi) and sustained borrow demand for SPACs and IPOs. Revenue generated from fixed income securities increased by 26% over the same time frame to $456 million.
In September 2021 alone, the global securities finance industry generated $790 million in revenue for lenders. The figure represents a month-over-month decrease of 1% from the $796 million generated for lenders in August 2021, and a significant 46% increase year over year from the $541 million generated in September 2020.
According to DataLend, the September year-over-year increase of 46% in lender-to-broker revenue was primarily driven by global equities, where the average fee increased from 55 to 71 basis points. The spin-off of Universal Music Group from French media conglomerate Vivendi was a significant driver of lending revenue.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $209 million in revenue in September, a 13% increase from 2020.
The top five earners in September 2021 were Vivendi (VIV FP), Robinhood Markets (HOOD), VMWare (VMW), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and WH Group (288 HK). The five securities in total generated over $107 million in revenue in the month.
DataLend is the securities finance market data division of EquiLend. DataLend tracks daily market movements and provides analytics across more than 60,000 unique securities in the $2.6 trillion securities finance market. www.datalend.com
EquiLend is a global financial technology firm offering trading, post-trade, market data, regulatory and clearing services for the securities lending, collateral and swaps industries. www.equilend.com