Servizi
Euroclear achieves robust third quarter results
Strong shareholder return and capital position
Russian sanctioned assets
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.
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.
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.
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.
This simplification of the corporate structure results in a significant reduction of complexity both in terms of governance and financial administration, while keeping direct participations in regulated entities at the level of Euroclear SA/NV. This merger also streamlines and accelerates the dividend upstreaming process.
As a trusted market infrastructure having contributed to the integration of European and global markets over decades, Euroclear is committed to advance the European Capital Markets Union. To instigate a meaningful dialogue with all involved stakeholders, Euroclear published a thought leadership paper on the European capital markets highlighting, key challenges, real opportunities and the critical need to improve integration and competitiveness, specifically in the post-trade sector.
To read the full paper, go to https://www.euroclear.com/content/dam/euroclear/news%20&%20insights/Format/Whitepapers-Reports/Whitepaper-Unlocking-Europe-capital-markets.pdf
In line with its ambition to advancing the understanding of sustainable finance, Euroclear announced its sponsorship of a new Chair in Sustainable Finance at the Solvay Brussels School of Economics and Management of the Université Libre de
Bruxelles (ULB). Professor Dr
Guntram Wolff will be the first holder of this newly created Chair, which will contribute to the creation of knowledge on sustainable finance, executive training as well as teaching.
Russia's invasion of
Ukraine in February 2022 resulted in market-wide application of international sanctions. Euroclear considers the application of international sanctions as a key obligation. Therefore, well established processes are in place which have allowed the group to implement the sanctions while maintaining our normal course of business.
As a result of the sanctions, blocked coupon payments and redemptions owed to sanctioned entities continue to accumulate on Euroclear Bank's balance sheet. At the end of
September 2024 , Euroclear Bank's balance sheet totalled €216 billion, of which €176 billion relate to sanctioned Russian assets.
In line with Euroclear's risk appetite and policies and as expected by the EU Capital Requirements Regulation, Euroclear's cash balances are re-invested to minimise risk and capital requirements. In the first nine months of 2024, interest arising on cash balances from Russian-sanctioned assets was approximately €5.15 billion. Such interest earnings are driven by the prevailing interest rates and the amount of cash balances that Euroclear is required to invest. Subject to Belgian corporate tax, these earnings generated €1.27 billion tax revenue for the Belgian State. As such, future earnings will be influenced by the evolving interest rate environment.
Effective 15 February 2024 , the EU Council adopted a Regulation requiring Central Securities Depositories (CSDs) holding reserves and assets of the Central Bank of
Russia with a total value of more than €1 million to apply specific rules in relation to the cash balances accumulating due to restrictive measures. These CSDs, such as Euroclear Bank, should account for and manage such extraordinary cash balances separately from their other activities, should keep separate the net profit generated and should not dispose of these ensuing net profits (e.g. in the form of dividends to shareholders).
In May 2024 , the European Commission has adopted a new regulation about a windfall contribution applicable to CSDs holding Russian Central Bank assets with a total value of more than €1 million. The profits generated by the reinvestment of these sanctioned amounts dating from 15 February 2024 onwards are required to be contributed to the European Fund for Ukraine. Consequently, Euroclear made a first payment of approx. €1.55 billion to the European Fund for
Ukraine in July 2024 .
Euroclear continues to act prudently and to strengthen its capital by retaining the remainder of the Russian sanction related profits as a buffer against current and future risks. Euroclear is focused on minimising potential legal, financial, and operational risks that may arise for itself and its clients, while complying with its obligations.
As a direct consequence of the sanctions and countermeasures, Euroclear faces multiple proceedings in Russian courts. Since Russia considers international sanctions against public order, Russian claimants initiated legal proceedings aiming mainly to access assets blocked in Euroclear Bank's books, by claiming an equivalent amount in Russian Ruble and enforcing their claim in Russia . Despite all legal actions taken by Euroclear and the considerable resources mobilised, the probability of unfavourable rulings in Russian courts is high since Russia does not recognise the international sanctions.
Euroclear Bank and Euroclear Investments are the two group issuing entities. The summary income statements and financial positions at Q3 2024 for both entities are shown below.
The drop in Q3 2024 figures compared to Q3 2023 reflects the booking of the windfall contribution related to the Central Bank of Russia's (CBR) assets dating from 15 February 2024 .
The evolution of Q3 2024 figures compared to Q3 2023 reflects the increase in intragroup dividend.
Euroclear group is the financial industry's trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency, and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives, and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation, and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International and Irish CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & International.
Pascal Brabant / pascal.brabant@euroclear.com / +32 475 78 36 62
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