(Información remitida por la empresa firmante)
BRUSSELS, Oct. 31, 2024 /PRNewswire/ — Results for the first nine months of 2024
Highlights
Euroclear’s business income and interest earnings reached record levels
Underlying operating income increased by 6% to reach €2.18 billion. Net profit increased by 8% to €890 million.
Underlying business income is up by 5% to €1,302 million, driven by record levels in settlement and safe keeping activities, with assets under custody crossing the €40 trillion mark for the first time ever. In Q3 2024, business income increased by 8% compared to Q3 2023, driven by strong performance especially in the Eurobonds & European assets and funds business.
Underlying interest income continues to increase, up 9% to €882 million in the context of sustained high interest rates environment and gradual policy rate cuts.
Pace of cost growth continues to slow
After a step-up in investment in digital capabilities, workforce and IT infrastructure in 2023, the growth of underlying operating expenses slowed to 3% for the first nine months of 2024.
In Q3 2024, underlying costs decreased by 1.5% compared to Q3 2023, reflecting Euroclear’s continued focus on cost mitigation and non-recurrence of specific items.
As a result, the business income operating margin improved to 24.7% for the first nine months of 2024.
Strong shareholder return and capital position
Underlying earnings per share increased by 8% to €283 in line with continued increase in net profit.
Euroclear group retains a very strong capital position, comfortably above regulatory requirements with an underlying Common Equity Tier 1 capital ratio slightly below 60%[1].
Russian sanctioned assets
Following the implementation of the EU windfall contribution regulation, Euroclear provisioned €2.9 billion as windfall contribution for the first nine months of 2024, of which a first tranche of €1.55 billion for H1 2024 was paid to the European Fund for Ukraine in July 2024.
Gradual rate cuts have led to a decline in interest income related to the Central Bank of Russia’s assets in Q3 2024 with the outlook for future interest earnings dependent on policymaking decisions.
The impacts of the Russian sanctions are detailed in the last section of this press release.
Valerie Urbain, Chief Executive Officer of Euroclear, commented:
«We are maintaining our trajectory of strong financial results and excellent performance, with our settlement and safe keeping activities reaching once again record levels. We remain focused on the execution of our strategy and delivering outstanding service to our customers, while continuing to invest to support our long-term growth.
We believe digital assets offer significant benefits and our teams have continued to innovate to advance their adoption across geographies and asset classes. After two successful issuances, Euroclear now welcomed the first issuance in USD by an Asia-based issuer on its Digital Securities Issuance (D-SI) platform. Euroclear took part in a groundbreaking pilot project to tokenise gold, Gilts and Eurobonds for collateral management and completed the dress rehearsal of its trial for Eurosystem wholesale Central Bank Digital Currency (CBDC) exploratory work. Finally, Euroclear joined forces with Singapore-based Marketnode to help establish a key market infrastructure in Asia-Pacific designed to simplify the management of fund flows and reduce settlement times by using Distributed Ledger Technology (DLT).
As a group with European roots, Euroclear reiterated its commitment to supporting the European Capital Markets Union. With Europe entering a new political cycle, Euroclear presented a detailed memorandum on the competitiveness in Europe’s markets and engaged with key stakeholders to chart the course for enhanced market development and integration in Europe. I firmly believe that by attracting more issuers and investors, by removing barriers to efficiency, competition and integration and by supporting innovation, European capital markets can become more liquid, resilient and competitive.»
Business performance
The key operating metrics (end of period unless stated otherwise) demonstrate an excellent business performance during the period.
Euroclear’s assets under custody reached a record €40 trillion, growing for the eighth quarter in a row, thanks to solid stock exchange performances coupled with robust results in fixed income.
Despite the usual summer slowdown, settlement volumes hit a new high due to sustained activity since the beginning of the year.
Funds depot is boosted by the success of ETFs, combined with the positive evolution of the stock valuations, and breaks its all-time record level close to €3.4 trillion.
The Collateral Highway’s outstanding continues to increase and is now very close to the early 2022 peak.
Business milestones
Reshaping traditional financial services
Euroclear made significant progress in its journey to become a digital, data-enabled Financial Market Infrastructure by welcoming the first Digital Native Note (DNN) issued by the Asian Infrastructure Investment Bank on its Digital Securities Issuance (D-SI) platform. This marks the first digital issuance in USD for Euroclear and the first such issuance by an Asia-based issuer on its platform. Euroclear’s DSI service enables the issuance, distribution and settlement of fully digital international securities on Distributed Ledger Technology (DLT).
In the related digital securities space, Euroclear, alongside Digital Asset and The World Gold Council, has successfully completed a groundbreaking pilot to tokenise gold, Gilts and Eurobonds for collateral management. This initiative showcases how DLT can revolutionise collateral mobility, enhance liquidity and boost transactional efficiency.
Furthermore, with the support of Paris Europlace, Euroclear has brought together a group of French banks around its D-SI platform and Banque de France’s DL3S platform for Central Bank Digital Currency (CBDC). As a result, these financial institutions will issue the first Digital Native Note (DNN) under French Law and settle it in CBDC.
Advancing the funds business
In October 2024, Euroclear acquired a strategic stake in Marketnode, a Singapore-based digital market infrastructure operator. By joining forces with Marketnode and its existing shareholders – the Singapore Exchange (SGX Group), Temasek and HSBC – Euroclear will contribute to establish a key market infrastructure in Asia-Pacific designed to simplify the management of fund flows and reduce settlement times by using new technology. This first strategic investment in Asia reinforces the region’s importance to Euroclear’s positioning and business growth.
In line with its commitment to make private markets more accessible to a wider range, Euroclear announced a pioneer collaboration with BlackRock. Both companies join forces to expand the distribution of BlackRock’s private market funds via Euroclear’s FundsPlace. With a global reach serving over 2,500 clients across the globe, FundsPlace is well-equipped to extend BlackRock’s diverse range of private market funds to an even broader array of investors.
Simplification of Euroclear’s group structure
On 1 October 2024, Euroclear completed the previously announced simplification of its group structure. Two out of the four financial holding companies of the Euroclear group, Euroclear AG and Euroclear Investments SA/NV, were successively merged into Euroclear Holding SA/NV, the ultimate parent entity of the Euroclear group.
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