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Global securities lending revenue generated US$2.34 billion for lenders in Q32021, according to DataLend.This represents a 33 per cent increase from the US$1.7 billion generated in Q3 2020.
In September 2021 alone, the global securities finance industry generated US$790 million in revenue for lenders, representing a month-over-month decrease of 1 per cent from the US$796 million generated for lenders in August 2021.
It also represents a significant 46 per cent increase year on year (YoY) from the US $541 million generated in September 2020.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional US$209 million in revenue in September, which marked a 13 per cent increase YoY.
According to DataLend, the September YoY increase of 46 per cent 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.
Revenue from equities increased by 34 per cent YoY to US$1.89 billion, driven by multiple corporate events, in particular, Naspers and Vivendi, and sustained borrow demand for special-purpose acquisition companies (SPAC) and initial public offerings (IPO).
Revenue generated from fixed income securities increased by 26 per cent over the same time frame to US$456 million.
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 US$107 million in revenue in the month.
