Euroclear clients deposited a record EUR 23 trillion of assets for safekeeping and asset servicing with the Euroclear group of national and international central securities depositories in 2012. This trillion euro increase is part of a wider and longer-term trend where our growth rate in various measures of operating performance surpassed our nearest competitors.
The launch in July 2012 of Euroclear's global "Collateral Highway" introduces a new collateral management and securities financing benchmark for the Euroclear group. By year-end 2012, the Collateral Highway mobilised EUR 700 billion of securities as collateral each day to a wide range of collateral takers. The Collateral Highway links commercial and investment banks, supranationals, central banks, central counterparties and other capital market infrastructure providers across time zones and markets.
Tim Howell, Chief Executive Officer of Euroclear SA/NV, said: "The uncertainty and volatility of local and international capital markets have shaped our 2012 operating results. Above all, the trust that our clients place with us to safeguard their assets under such risk-prone market conditions is clearly evidenced in the EUR 23 trillion record attained in 2012. Moreover, providing deeper and more diverse pools of securities to be used as collateral, via the Collateral Highway, has attracted many new collateral givers and takers, as well as business partners, to Euroclear in order to better manage liquidity, credit and counterparty risks. In this regard, our relative peer performance is strong."
As trading volumes varied by country and asset class in 2012, operating performance fluctuated among the Euroclear entities, with some experiencing year-over-year gains in some measures while declining in others.
The combined and entity-specific results of the Euroclear group are:
• The value of securities held for Euroclear clients at the end of 2012 was a record EUR 23.0 trillion, almost one trillion euros more than the EUR 22.1 trillion reached at year-end 2011, denoting a 4% increase.
• Turnover, or the value of securities transactions settled, was EUR 541.6 trillion in 2012, a 7% decrease compared with EUR 580.6 trillion in 2011.
• The number of netted transactions settled in the Euroclear group dipped slightly by 2% in 2012 at 159 million, compared with 163 million in 2011.
• Euroclear’s global Collateral Highway mobilised EUR 700 billion of collateralised transactions each day by year-end 2012, a year when the repo market contracted by 14% according to ICMA and the European Repo Council. Launched in July 2012, the Collateral Highway has no direct year-over-year comparison data. In 2011, Euroclear Bank’s triparty collateral management and Euroclear UK & Ireland’s delivery-by-value services achieved the equivalent of EUR 503 billion per day.
Breakdown per Euroclear entity
The operating results for Euroclear Bank were relatively strong in the ICSD sector. Securities held in custody for clients was EUR 10.8 trillion in 2012, slightly above the EUR 10.7 trillion the year before. The number of transactions processed by Euroclear Bank in 2012 rose to 64.2 million, 8% more than the 59.4 million in 2011.
The value of transactions processed by Euroclear Bank in 2012 declined to EUR 307.1 trillion, a 7% reversal on the EUR 328.5 trillion reported in 2011. The decline in turnover at Euroclear Bank is linked to lower trading volumes in European fixed income securities and lower ticket sizes.
The value of securities held for clients was EUR 5.3 trillion in 2012, an increase of 6% when compared to the EUR 5.0 trillion in 2011. Turnover at Euroclear France slipped by 12% in 2012 to EUR 71.8 trillion from EUR 81.9 trillion in 2011. The number of netted transactions decreased by 14% to 20.5 million in 2012, from 23.7 million in 2011. Lower trading activity, particularly in the cash equities markets, and a move to more buy-and-hold strategies by French financial firms influenced these results.
Euroclear UK & Ireland
Securities held for clients through Euroclear UK & Ireland increased by 12% in 2012 to a record equivalent of EUR 4.5 trillion (GBP 3.8 trillion) from EUR 4.0 trillion (GBP 3.4 trillion) the previous year. Turnover dropped by 5% in 2012 to the equivalent of EUR 145.8 trillion (GBP 122.3 trillion) from EUR 153.0 trillion (GBP 128.4 trillion) in 2011.
The number of transactions settled by Euroclear UK & Ireland declined by 7% in 2012 to 51.4 million from 55.2 million in 2011. General trading volume decreases combined with smaller ticket sizes are behind the settlement volume and turnover trends. The growth in assets under custody can be attributed to the recovery in UK market capitalisation, as the FTSE 100 index has returned to pre-crisis levels.
The value of securities held for clients at Euroclear Nederland was slightly up on the 2011 figure of EUR 865 billion, totalling EUR 873 billion at year-end 2012. Turnover dipped by 4% in 2012 to EUR 4.5 trillion from EUR 4.7 trillion in 2011. Euroclear Nederland also settled fewer netted securities transactions in 2012, processing 5.0 million securities transactions compared to 5.2 million the year before. Decreases in both turnover and settled transactions can be attributed to suppressed financial market conditions.
The value of securities held for clients at year-end 2012 was EUR 157 billion, over 20% higher than the EUR 130 billion recorded in 2011, bringing Euroclear Belgium back to levels last experienced in 2010. The record value of securities held on behalf of clients is directly linked to rapidly recovering equity market activity in Belgium.
Euroclear Belgium retreated from its record 2011 turnover of EUR 588 billion by 4% to EUR 564 billion in 2012. The number of transactions settled in 2012 was roughly the same as in 2011 at 1.9 million transactions.
Euroclear Sweden once again topped its annual turnover record, achieving a 2% upswing to the new record of EUR 11.4 trillion (SEK 99 trillion) in 2012 from the previous year’s EUR 11.2 trillion (SEK 97 trillion). The number of transactions settled by Euroclear Sweden subsided by 15% during the year to 10.8 million compared with 12.7 million in 2011, largely as a result of lower levels of on-exchange equities trading. The value of securities held for clients by Euroclear Sweden rose by 5% to EUR 1,092 billion (SEK 9.6 trillion) in 2012 compared with EUR 1,039 billion (SEK 9.0 trillion) in 2011.
Securities held for clients increased by over 8% in 2012 to EUR 237 billion from EUR 219 billion in 2011. Turnover at Euroclear Finland receded by 14% in 2012 to EUR 431 billion compared with EUR 503 billion in 2011, while the number of transactions settled in 2012 remained flat with 2011 at 5.1 million. Reduced turnover at Euroclear Finland is ascribed to lower fixed-income trading volumes and the introduction of CCP netting for small cap equity trades in 2012.
Xtrakter processed a total of 1.2 billion transactions in 2012, representing a 26% increase from the 950 million transactions processed in 2011.
The value of funds held for clients in 2012 reached EUR 1.3 trillion, 8% higher than the EUR 1.2 trillion at the end of 2011. FundSettle’s business continued to grow at a remarkable rate in 2012, with the value of assets under custody increasing by 33%. FundSettle now covers more than 65,000 offshore and domestic funds from 26 countries, including clients’ in-house funds.
Fund orders routed through Euroclear UK & Ireland’s EMX Message System increased by 5% in 2012 to a record 41 million messages compared with 39 million messages in 2011.