The Euroclear group's 'safe haven' attributes, particularly during the difficult financial market conditions in 2009, attracted market participants to deposit a record level of securities for safekeeping with Euroclear.
At the end of 2009, EUR 20.2 trillion of client assets were held by Euroclear entities, an increase of 12% compared with the end of 2008. The number of netted transactions processed by the Euroclear group rose by 14% to 180 million in 2009, although the aggregated value of transactions settled by Euroclear's international and national central securities depositories declined by 8% to EUR 513.5 trillion during the year.
Pierre Francotte, Chief Executive Officer of Euroclear SA/NV, said: "The turmoil in 2009 was a major challenge for the securities markets. In this delicate environment, Euroclear was able to gain business and demonstrate its technical resilience and operational stability. Asset protection and risk management are two areas in which Euroclear has been a recognised leader for many years. This has contributed to the solid - and by some measures record - operational performance we achieved in a difficult market."
As trading volumes varied by country and type of security in 2009, operating performance fluctuated among Euroclear entities, with some experiencing year-over-year gains in some measures while declining in others. The 2009 results reflect the first full year of data from Euroclear Finland and Euroclear Sweden, which became part of the Euroclear group at the end of October 2008. The 2008 data only includes the months of November and December for Euroclear Finland and Euroclear Sweden.
The combined and entity-specific results of the Euroclear group are:
- The value of securities held for Euroclear clients at the end of 2009 was a record EUR 20.2 trillion, 12% higher than the EUR 18.1 trillion at year-end 2008.
- Turnover, or the value of securities transactions settled, was EUR 513.5 trillion in 2009, an 8% decrease compared with the EUR 559.8 trillion reported in 2008.
- The number of netted transactions settled in the Euroclear group increased by 14% to a record 179.6 million in 2009 compared with 157.3 million in 2008.
- The combined daily value of collateral provision outstanding in Euroclear Bank and Euroclear UK & Ireland rose by 28% in 2009 to EUR 544.2 billion from EUR 424.3 billion at the end of 2008.
Breakdown per Euroclear entity
Securities held in custody for clients rose by 8% to a record EUR 9.8 trillion at the end of 2009 from EUR 9.1 trillion at the end of 2008. The number and value of transactions processed by Euroclear Bank in 2009 declined by 6% and 22%, respectively, due primarily to lower levels of repos and securities financing transactions in the markets during the year.
Triparty collateral management deals outstanding administered by Euroclear Bank at year-end 2009 was about the same as at year-end 2008 - EUR 212.6 billion per day at the end of 2009 compared with EUR 211.9 billion at the end of 2008. Notwithstanding substantially lower levels of leveraged borrowing in the banking system generally and less overall collateralised trading, most financing was provided by central banks through bilateral agreements in 2009. Of significance, the most recent Euroclear Bank figures represent a growing interest in triparty services from a broader mix of clients, rather than increased business from existing clients, as the need for secured financing continues to gain recognition.
A similar pattern of performance was experienced in Euroclear France, where the value of securities held for clients rose by 12% to EUR 5.0 trillion in 2009 from EUR 4.5 trillion in 2008, while the number and value of transactions settled declined. In 2009, turnover at Euroclear France was EUR 79.7 trillion, 15% lower than the EUR 93.6 trillion recorded in 2008, and the number of netted transactions declined by 12% in 2009 to 28 million from 31.7 million the previous year. Lower overall trading activity, particularly in equity trading by French retail investors, was the primary factor accounting for this development.
Euroclear UK & Ireland
New records were set by Euroclear UK & Ireland in nearly all measures of performance. Turnover grew by 13% in 2009 - its seventh consecutive year of turnover growth - to the equivalent of EUR 201.4 trillion from EUR 177.7 trillion in 2008, with an 8% dip in the number of transactions settled to 63.3 million in 2009 compared with 69.1 million in 2008.
Securities held for clients through Euroclear UK & Ireland increased by 26% in 2009 to the equivalent of EUR 3.3 trillion from EUR 2.6 trillion the previous year. At year-end 2009, average daily outstandings in daily Delivery-by-Value (DBV) and money-market instrument repo instructions at Euroclear UK & Ireland rose by 56% to EUR 331.6 billion compared with EUR 212.4 billion at the end of 2008. Increased issuance of UK Treasury bills and gilts in 2009 boosted the amount of top-quality collateral available for cash collateral operations in the UK.
With a record number of transactions processed in 2009, rising 18% from 4.4 million in 2008 to 5.2 million in 2009, Euroclear Nederland settled EUR 4.4 trillion of securities transactions, about 3% more than the EUR 4.3 trillion in 2008. A 7% rise in securities held in custody for clients, from EUR 819 billion in 2008 to EUR 880 billion in 2009, indicates solid performance for Euroclear Nederland last year.
Euroclear Belgium experienced a rise in turnover of 19% in 2009 to EUR 399 billion from EUR 335 billion in 2008, based on 1.9 million transactions, a decrease of 14% from the 2.2 million transactions settled in 2008. Securities held at Euroclear Belgium at year-end 2009 were valued at EUR 140 billion, 9% above the 2008 level of EUR 128 billion, which was restated due to a change in calculation method.
Euroclear Finland and Euroclear Sweden
As the reported data for these two Euroclear central securities depositories in 2008 only included the months of November and December, year-over-year performance comparisons are offered for interest only. These entities became part of the Euroclear group at the end of October 2008.
In 2009, central counterparties were introduced for the first time in Finland and Sweden, which impacted transaction volumes in these CSDs. Euroclear Finland settled 14 million transactions valued at EUR 508 billion in 2009, compared with 18 million transactions valued at EUR 845 billion in 2008. Euroclear Finland held EUR 226 billion of client assets in custody at the end of 2009, 14% above the EUR 199 reported at year-end 2008.
Euroclear Sweden settled 28 million transactions in 2009 valued at the equivalent of EUR 7.3 trillion, compared with 31 million transactions valued at EUR 12.3 trillion in 2008. EUR 804 billion of securities were in safekeeping for clients at Euroclear Sweden at the end of 2009, 25% higher than the EUR 643 billion at the end of 2008.
Like most other sectors, European investment funds had a volatile year in 2009. However, recent trends, according to September 2009 figures from the European Fund and Asset Management Association (EFAMA), show improvement over 2008.
Reflecting this trend, the number of fund transactions processed by the Euroclear group, including EMXCo, reached a record 11 million in 2009, about 10% above the 10 million processed in 2008. FundSettle now covers more than 43,000 offshore and domestic funds from 22 countries, including clients' in-house funds.
EMXCo, part of the Euroclear group since 2007, routed 30 million investment fund transaction messages in 2009, a 32% increase from the 22.7 million messages routed in 2008. This increase is attributable to continued growth in business from existing clients, as well as to the growing number of new fund providers and distributors using the EMX Message System in 2009.
Xtrakter, part of the Euroclear group since April 2009, processed a total of 578 million transactions in 2009, representing a 105% increase on the 282 million transactions processed in 2008.