As a result of Euroclear Bank's strong business growth in 2004, leading to unprecedented levels of turnover and client assets held in custody, a record EUR 60 million in rebates and tariff reductions will be provided to clients as of 1 January 2005. Additional tariff reductions will be announced during the coming year.
Over the past year, as of the third quarter 2004, the value of client assets held in custody at Euroclear Bank grew nearly 14% to EUR 5.8 trillion. The number of transactions processed increased more than 10% to 18 million thus far in 2004.
The rebate of EUR 40 million approved today by the Euroclear Board, the highest ever paid by Euroclear Bank, will be allocated to clients on a pro-rata basis, according to fees paid for settlement, custody and securities borrowing services over the past 12 months.
In addition, Euroclear Bank is cutting its tariffs by more than EUR 20 million in 2005. Effective 1 January 2005, safekeeping fees for international securities (e.g. eurobonds, MTNs, ECPs) will be reduced by EUR 11 million and communication-reporting fees will be cut by EUR 9 million. Depending on individual client business volumes, the rebate and tariff reductions represent an effective fee cut of as much as 12%. Each client will be informed before year-end 2004 of the precise rebate it will receive in early January 2005.
Pierre Francotte, Chief Executive Officer of Euroclear Bank, said: "We continue to set our goal at reducing costs for clients. As our business is a scale business, the solid growth we have achieved thus far in 2004, from both organic and new business flows, has enabled us to further reduce our service prices for clients by leveraging the resulting economies of scale. We remain committed to delivering an active programme of day-to-day service enhancements, in response to client demand, as we pursue our longer-term goal of reducing client costs even further through market-practice harmonisation and the creation of a single processing platform for the Euroclear group."
Over the past five years, Euroclear Bank settlement and safekeeping fees have each been reduced by 20%. In addition, Euroclear Bank has granted rebates of EUR 100 million. The cumulative effect of rebates and tariff reductions, including those delivered through steeper sliding-scale discounts, has resulted in EUR 533 million in savings for clients over the past five years.
Euroclear is the world's largest provider of domestic and cross-border settlement and related services for bond, equity and fund transactions. Market owned and market governed, the Euroclear group comprises Euroclear Bank, based in Brussels, as well as Euroclear France, Euroclear Nederland and CRESTCo, the central securities depositories of France, the Netherlands, and the UK and Ireland, respectively. The CSD of Belgium, CIK, is expected to join the group in 2005. The total value of securities transactions settled by Euroclear is in excess of EUR 250 trillion per annum, while assets held for clients are valued at more than EUR 12 trillion. Euroclear Bank is rated AA+ by Standard & Poor's and Fitch.