Securities Finance H1 2022 Review – IHS Markit


Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Find the solutions you need by accessing our extensive portfolio of information, analytics and expertise. The IHS Markit team of subject matter experts, analysts and consultants offers the actionable intelligence you need to make informed decisions.
Critical analysis and guidance spanning the world’s most important business issues.
Stay abreast of changes, new developments and trends in their industry.
A global team of industry-recognized experts contributes incisive and thought-provoking analysis.
Broaden your knowledge by attending IHS Markit events that feature our subject-matter experts. Find webinars, industry briefings, conferences, training and user groups.
During COVID-19, IHS Markit is offering more online events for the safety of our guests.
IHS Markit will resume our in-person events once it is safe to do so.
Missed an event or webinar? Review the recordings of past online events.
IHS Markit is the leading source of information and insight in critical areas that shape today’s business landscape. Customers around the world rely on us to address strategic and operational challenges.
The experts and leaders who set the course for IHS Markit and its thousands of colleagues around the world.
Sustainability drives the entire IHS Markit enterprise. It’s how we do business by guiding our values and culture on the notion that we can make a difference.
Join a global business leader that is dedicated to helping businesses make the right decisions. Be a part of a family of professionals who thrive in an exciting work environment.
Securities finance revenue $6.1bn in H1 2022, best half-year performance since 2008
Global securities finance revenues reached $6.1bn in the first half of 2022, an increase of 12% YoY. Utilization and lendable assets saw marginal increases, while average loan balances continue to surge, increasing 11% YoY. Average fees showed mixed results but were led by Asian Equity specials in South Korea and Taiwan, in addition to corporate bonds pairing rising balances with growing fees. US equity special balances rebounded strongly from a poor H2 2021, posting a 4-year quarterly high. ETP average special balances crossed the $2bn mark for the first time in 4 years, driving a strong first half of the year, resulting in revenues increasing 48% YoY. Corporate bond earnings climbed the most YoY, rising 97% whilst ADR revenues faltered, declining 67% YoY.

Americas equity finance revenues came in at $2.2bn for H1 2022, a 9% YoY increase. Special balances rebounded powerfully, crossing $18bn on average as Q2 set a 4-year quarterly high. Both US and Canadian Equity balances rebounded, posting revenue gains of 8% and 5%, respectively. The increases were driven by growing balances (14% and 23% YoY) that offset the declines seen in average fee spreads. Lucid Group Inc (LCID) was a top performer in H1 2022, generating $150mn in revenues and ranking as one of the highest revenue generators over the past several years.

Equity finance revenues in Europe rebounded strongly during the first half of 2022, increasing 9% YoY. This growth was supported by a recovery in specials and an increase of 14% in average balances which outweighed a decline of 6% in fee spreads. Lendable assets continued their rise, with an increase of 8% YoY and much like balances, utilization rose an impressive 21%. While two key markets in the region, France, and UK, saw revenues decrease 15% and 10% respectively, several markets prospered in the first half of 2022. Norwegian equities led the charge as revenues surged 60% over the previous year, while Swedish, Swiss and Italian equities saw their revenues grow in excess of 30% which was largely driven by a combination of significant increases in average balances and fee spreads. German equity revenues grew by a modest 16% over the period, driven by two of the top three earners in European equities Varta AG and Mercedes Benz Group Ag.

While APAC equities did not match the performance of H2 2021, the region returned over $1bn in revenue representing a 20% YoY increase. This was driven in large part by the fee spreads jumping 14%. Special balances retreated compared with H2 2021 levels but maintained their strong recovery following the lifting of short sale bans. South Korea and Taiwan delivered the highest YoY returns, with returns close to doubling compared to the prior year. Australia was the only market to exceed returns compared to H2 2021 as fee spreads jumped 68%. Australia’s top earner, Bhp Group Ltd claimed the 4th place out of all Asian equities, generating $12.65mn in revenues while three Korean names, Krafton Inc, LG Energy Solution Ltd and Kakaobank Corp grasped the top 3 spots.

Global ETP lending revenues were $453mn for H1, continuing to set new all-time highs, representing a 48% YoY increase. March set the mark as being the top revenue generating month, crossing $85mn. There were several drivers contributing to the record-breaking numbers, but the rise of special balances set the blistering pace. ETP average special balances in Q2 crossed the $2bn mark, setting a new high across several years and a 52% increase when compared with Q2 of 2021. Fixed Income ETP lending generated $167mn in H1, representing 37% of global ETP returns. Maintaining consistency, 9 of the top 10 revenue generating assets were US ETPs as the Ishares Iboxx $ High Yield Corporate Bond Fund (HYG) held onto its top rank as the best earner for the 3rd consecutive half-year period generating $66mn in fee spread returns.

With no top earner to lead the charge, unlike prior half-year periods, Depository Receipt returns fell to $164mn representing a 60% YoY decrease. ADRs represented 74% of the total Depository Receipts revenues with $122mn generated, a 67% YoY decrease. ADR underperformance was comprehensive, as average balances decreased 41% alongside a similar decrease in fee spreads of 45%.

Corporate bond lending revenues continued their ascension in the first half of 2022, reaching $437mn, boasting a 97% YoY increase. Sparked by increasing balances (up 30% YoY) and fees (up 51% YoY), H1 2022 marks the highest lending revenue for corporate bonds since the start of the pandemic. Average loan balances reached $285bn, the highest since the 2008 financial crisis. Q2 delivered stellar returns, with May revenues reaching just under $74mn, the highest monthly revenue in several years.

Fee-based revenue for government bond lending came in at $874mn for H1, the largest in several half-year periods and up 12% YoY. Government bond borrow demand remained robust, with $1.3bn in positive-fee global balances for H1, reflecting a 7% YoY Increase improving upon 2021 H2’s lofty mark. Securities finance returns from lending US Treasury securities in H1 2022 represented 52% of the positive fee-spread income. Revenues from European sovereigns were $317mn, up 27% YoY driven by a robust increase in average balances and fees of 11% and 15%, respectively. Emerging Market bond fee spread returns eclipsed $37mn posting a strong increase of 59% when compared with the previous year. The highest revenue generating bond was the UST due Feb 2024 (CUSIP 91282CEA5) which generated $10.9mn in revenue, which was better than any government issue over the past 12 months. Much like H2 2021, 7 of the top 10 revenue generating bonds are USTs.


2022 is off to an impressive start for Securities Finance revenues, clearing $6.1bn in fee spread returns, which is the highest for a half-year period since H1 of 2018. Whilst not quite at the pace needed to eclipse 2008 full year revenues, 2022 is well poised to deliver the strongest performance since the global financial crisis. All core asset classes supported robust returns except for ADRs which declined. Exchange traded products and corporate bonds remained the top performers for the second consecutive half-year period, delivering considerable returns. Fixed income assets were key, as the top 3 performing ETPs were bond related. Overall, increasing balances across the main asset classes were the key linchpin to a strong H1 2022.
Posted 24 August 2022 by Matt Chessum, Director securities finance
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.
Join our panel of experts from @RBC, Standard Chartered Bank and The Value Exchange as well as our own Richard Wils…
Join our webinar on Thursday, 19 May as we explore the impact of sustained inflation on dividend payments in 2022…
Join our webinar next week in partnership with Supply Management Insider as the industry experts unveil the necessa…
S&P Global KY3P® is proud to co-sponsor Vendor & Third Party Risk USA with our own Peter Pernebo speaking on 1 June…


🤞 Don’t miss these tips!

We don’t spam! Read more in our [link]privacy policy[/link]


Don’t miss these tips!

We don’t spam! Read our [link]privacy policy[/link] for more info.

    Leave a comment
    Your email address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Hemant Malhotra
    10 Reasons to Use Your Credit Card
    January 22, 2021
    10 Reasons to Use Your Credit Card
    Hemant Malhotra
    Explaining the Market Terms: Bull and Bear Markets
    July 2, 2022
    Explaining the Market Terms: Bull and Bear Markets
    Hemant Malhotra
    Fin Tech: The Future of banking
    January 25, 2021
    Fin Tech: The Future of banking
    Sponsored Pix
    Subscribe to Our Newsletter

    Don’t miss these tips!

    We don’t spam! Read our [link]privacy policy[/link] for more info.