Global securities lending revenue grows 1.18% YoY for April
06 May 2025 Global
Image: artrachen/stock.adobe.com
The global securities finance industry generated US$856 million in revenue for lenders in April, up 1.18 per cent year-on-year (YoY), according to EquiLend Data & Analytics.
Interdealer financing activity, characterised by securities transactions between broker-dealers, increased 3 per cent YoY, generating US$249 million in revenue for April.
Global equity revenue decreased by 2 per cent as a drop in fees of 13 per cent offset an 11 per cent increase in balances.
Despite an increase in market volatility due to ongoing tariff negotiations and increased attention on the Federal Reserve's forward rate guidance, EquiLend says lending revenue for US stocks continued to fall by 15 per cent, with average fees declining 24 per cent YoY.
The decline in fees suggests hedge funds may be taking a more cautious approach, the firm adds, with many long-short equity managers sitting on the sidelines or reducing short positions amid the unpredictable market environment.
Equity lending revenue in EMEA was roughly flat YoY as fees were down 19 per cent compared to April 2024, while balances increased by 19 per cent.
The Netherlands led the EMEA region with a 40 per cent YoY gain. The surge in revenue was driven by a substantial increase in fees of 21 per cent and an increase in loan balances of 9 per cent.
In APAC, South Korea and Hong Kong securities lending markets outperformed YoY with revenue gains of 382 per cent and 121 per cent, respectively.
This surge in South Korea was driven by a 241 per cent change versus the prior month, when the country lifted the ban on short selling at the end of March.
Every other APAC market saw a decline in revenue month-over-month. The top earner in APAC was Korean equity LG Energy Solution (373220 KS), generating just over US$8 million in revenue for the month for lenders.
Global fixed income revenue increased 12 per cent YoY as government debt lending revenue improved by 13% per cent and corporate debt by 11 per cent.
While average fees for both government and corporate debt fell by similar margins, 9 per cent and 13 per cent respectively, the volume of bonds on loan increased substantially by 15 per cent and 25 per cent YoY.
The surge in fixed income lending was largely driven by increased demand for high-quality collateral amid overall market conditions and volatility.
Additionally, corporate bond lending saw heightened activity in the high-yield segment as investors positioned for potential credit spread widening in anticipation of economic slowdown concerns.
The top five earning securities in the global lending markets in April were SGS SA, Volvo AB, LG Energy Solution, Pacific Biosciences California Inc, and Rocket Companies Inc. The five securities in total generated US$42 million in revenue for lenders in the month.
Interdealer financing activity, characterised by securities transactions between broker-dealers, increased 3 per cent YoY, generating US$249 million in revenue for April.
Global equity revenue decreased by 2 per cent as a drop in fees of 13 per cent offset an 11 per cent increase in balances.
Despite an increase in market volatility due to ongoing tariff negotiations and increased attention on the Federal Reserve's forward rate guidance, EquiLend says lending revenue for US stocks continued to fall by 15 per cent, with average fees declining 24 per cent YoY.
The decline in fees suggests hedge funds may be taking a more cautious approach, the firm adds, with many long-short equity managers sitting on the sidelines or reducing short positions amid the unpredictable market environment.
Equity lending revenue in EMEA was roughly flat YoY as fees were down 19 per cent compared to April 2024, while balances increased by 19 per cent.
The Netherlands led the EMEA region with a 40 per cent YoY gain. The surge in revenue was driven by a substantial increase in fees of 21 per cent and an increase in loan balances of 9 per cent.
In APAC, South Korea and Hong Kong securities lending markets outperformed YoY with revenue gains of 382 per cent and 121 per cent, respectively.
This surge in South Korea was driven by a 241 per cent change versus the prior month, when the country lifted the ban on short selling at the end of March.
Every other APAC market saw a decline in revenue month-over-month. The top earner in APAC was Korean equity LG Energy Solution (373220 KS), generating just over US$8 million in revenue for the month for lenders.
Global fixed income revenue increased 12 per cent YoY as government debt lending revenue improved by 13% per cent and corporate debt by 11 per cent.
While average fees for both government and corporate debt fell by similar margins, 9 per cent and 13 per cent respectively, the volume of bonds on loan increased substantially by 15 per cent and 25 per cent YoY.
The surge in fixed income lending was largely driven by increased demand for high-quality collateral amid overall market conditions and volatility.
Additionally, corporate bond lending saw heightened activity in the high-yield segment as investors positioned for potential credit spread widening in anticipation of economic slowdown concerns.
The top five earning securities in the global lending markets in April were SGS SA, Volvo AB, LG Energy Solution, Pacific Biosciences California Inc, and Rocket Companies Inc. The five securities in total generated US$42 million in revenue for lenders in the month.
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