Securities Finance February Snapshot 2025

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February revenues grow YoY as APAC awakens.

• Asian equity revenues grow 29% YoY.
• Average fees increase 70% YoY across Exchange Traded Funds
• Utilization continues to increase across corporate bonds
• Geopolitical developments and volatility create opportunities for lenders.

In February, the securities lending market generated revenues of $876million, reflecting an 5% increase year-over-year. Balances remained elevated throughout the month growing 14% year-on-year, but average fees declined by 5%. Exchange traded funds and government bonds continued to outperform, in line with the activity seen throughout January.

Across the equity markets, all equity revenues increased by 2% year-on-year as returns were buoyed by significant growth seen across Asian equity revenues. Securities lending revenues across the APAC region grew by 29% year-on-year as activity picked up across Hong Kong, Malaysia and Japan. Growth continued to be seen in Taiwan with revenues increasing by 44% year-on-year to $62M. Average fees increased across the APAC region, topping 1%. Across the Americas, revenues declined as average fees fell by 24% Year-on-year. The largest decline was seen across Mexican equities (-21%) followed by the US (-23%) and ADRs (-19%). EMEA equity revenues continued to show growth when compared with 2024, growing by 2% year-on-year to $55M. Strong revenue growth was seen across several countries such as Turkey (+280%), Poland (+135%), Belgium (+86%) and Spain (+62%). Some of the higher revenue generating countries such as Norway (-50%) and Sweden (-22%) did experience declines, however. Average fees fell 11% year-on-year across EMEA to 0.4% but the 19% growth in balances helped to sustain revenue growth.

Interest in exchange traded funds continued to grow throughout February as demand for leveraged, commodity and corporate bond ETFs pushed revenues higher. Market volatility across the US technology sector, following company earnings, and further trade tariffs increased average fees for several ETFs. Revenues across all regions showed strong year-on-year growth with average balances also growing by 117% across the APAC region.

Fixed income assets performed well during the month with balances, utilization and revenues increasing year-on-year across both government and corporate bonds. Government bond revenues increased by 18% to $168M. Strong year on year growth was seen across both Asian and EMEA government bonds as both average fees and balances also increased. Average fees continued to decline across corporate bonds, falling to 28bps. Revenues reached $77M during the month, representing a 1% increase Year-on-year. Despite an increase in balances, utilization increased to 6.41% during February, its highest level for many months.

February proved to be a month of significant volatility and challenges for the global economy, driven by trade tariffs, geopolitical tensions, and inflationary pressures. While the securities lending market demonstrated resilience with a year-over-year revenue increase, the mixed performance across various regions highlighted the ongoing disparities in market conditions. The strong growth in the APAC region, particularly in equity revenues, contrasted sharply with declines in the Americas, underscoring the impacts of regional economic dynamics and investor sentiment. As we move forward, the interplay between trade negotiations, central bank policies, and geopolitical developments will remain critical in shaping the economic landscape. The potential for both escalation and resolution in trade tensions, along with the prospects for stability in Ukraine, will be pivotal in determining the trajectory of markets and economic growth in the coming weeks and months.

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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.