BlackRock reported its lowest quarterly securities lending earnings since 2015 in Q1, after achieving record-breaking full-year returns in 2020.
The asset management behemoth chalked up lending revenue of $127 million for the first three months of the year, down from $131 million and $158 million in Q4 and Q1 2020, respectively.
In its latest earnings statement, BlackRock attributed the downturn to lower spreads, partially offset by higher average balances of securities on loan.
The soft start to the year means BlackRock will be hard-pressed to recreate last year’s total earnings, when it brought in $652 million, largely propped up by a stellar second quarter ($210 million), its best full-year performance since at least 2015.
BlackRock bundles its securities lending figures with its investment advisory and administration fees. The services group achieved collective earnings of $3.6 billion in Q1, up $537 million from the previous quarter.
This was primarily driven by the positive impact of market beta and foreign exchange movements on average assets under management and organic growth, and partially offset by the impact of yield-related fee waivers on certain money market funds and strategic pricing changes to certain products, lower securities lending revenue, and the effect of one less day in the quarter, BlackRock states.
