The Latest Securities Lending Industry Statistics Explained
Global securities lending revenue was about $9.9 billion in 2019
The statistic states that the total revenue generated from global securities lending reached approximately $9.9 billion in the year 2019. Securities lending is the practice of temporarily transferring securities from one party (lender) to another (borrower) in exchange for a fee. This revenue figure reflects the fees earned by lenders for allowing borrowers to use their securities for various purposes such as short selling, hedging, or arbitrage. Securities lending plays a crucial role in the financial markets by improving overall market liquidity and facilitating smooth functioning of various trading activities. The substantial revenue generated in 2019 highlights the significance and scale of securities lending in the global financial industry.
In the first half of 2021, global securities lending revenues typed $6 billion, experiencing a 15% increase on a year-to-year basis.
The statistic indicates that in the first half of 2021, the total revenues generated from global securities lending amounted to $6 billion, marking a 15% growth compared to the previous year. Securities lending involves the temporary transfer of securities from one party to another in exchange for a fee. The increase in revenues suggests that there was a higher demand for securities lending services during this period, either due to market conditions, regulatory changes, or other factors. This growth in revenues reflects a positive trend in the securities lending market, indicating that institutions and investors are actively engaging in these transactions to optimize their portfolios and generate additional income.
In 2020, global securities lending revenue was approximately $7.9 billion, which was a drop of 10.6% from the prior year.
The statistic indicates that in 2020, the total revenue generated from global securities lending activities was approximately $7.9 billion, representing a 10.6% decline compared to the previous year. This suggests that there was a decrease in the overall value of securities being lent by financial institutions and investors around the world. Possible reasons for this decline could include reduced market activity, changes in regulatory environments, shifts in investor behavior, or economic uncertainties stemming from global events such as the COVID-19 pandemic. Despite the decrease in revenue, securities lending remains an important financial service that provides liquidity to markets and enables investors to maximize their returns through short selling and other trading strategies.
In 2019, equities made up 90% of total on-loan value in the global securities lending market.
In 2019, equities accounted for 90% of the total on-loan value in the global securities lending market. This statistic indicates the significant dominance of equities in the lending market, highlighting the preference for borrowing and lending stocks among market participants. The high percentage suggests that equities were the most commonly borrowed and lent securities compared to other types of financial instruments such as bonds or commodities. This information is crucial for understanding the dynamics of the global securities lending market and the importance of equities as key assets for lending purposes.
The Asia-Pacific region experienced the largest growth in securities lending in 2019, with a 25% increase in on-loan balances.
The statistic indicating that the Asia-Pacific region had the highest growth in securities lending in 2019 with a 25% increase in on-loan balances suggests a significant rise in the demand for securities lending services within that geographic area. Securities lending involves temporarily transferring securities from a lender to a borrower in exchange for collateral, often to facilitate short selling or hedging activities. The substantial increase in on-loan balances indicates a growing interest in securities lending among financial institutions, hedge funds, and other market participants in the Asia-Pacific region, potentially driven by factors such as increased market liquidity, demand for short-term financing, or the pursuit of yield-enhancing strategies. This trend underscores the region’s evolving role in global financial markets and may have implications for market dynamics, risk management practices, and regulatory oversight in the securities lending industry.
In North America, securities lending revenue has declined by around 19.6% in 2020 compared to 2019.
The statistic suggests that in North America, the revenue generated from securities lending experienced a notable decrease of approximately 19.6% in 2020 when compared to the previous year, 2019. This decline indicates a significant shift in the profitability of securities lending activities in the region over the specified period. Factors such as market volatility, economic uncertainty, and changes in investor behavior may have contributed to this decrease in revenue. The statistic highlights the challenges and fluctuations experienced in the securities lending industry in North America during the specified time frame, reflecting the dynamic nature of financial markets and the need for adaptability in response to changing conditions.
In Europe, the securities lending revenue has declined by around 5.2% in 2020 compared to the previous year.
The statistic indicates that in Europe, the revenue generated from securities lending decreased by approximately 5.2% in 2020 when compared to the previous year. This decline suggests that there has been a reduction in the income generated from lending securities, which could be attributed to various factors such as market conditions, changes in interest rates, or shifts in investor behavior. A decrease in securities lending revenue may impact financial institutions, investors, and overall market liquidity, highlighting potential challenges and shifts within the European securities lending industry.
Equity lending dominated the securities lending market, accounting for about 90% of total lending in 2019.
In 2019, the securities lending market saw a significant dominance of equity lending, which represented approximately 90% of the total lending activity in the market. This statistic indicates that the majority of securities being borrowed and lent during that period were equity-based instruments, such as stocks and shares. The prominence of equity lending suggests a strong demand for leveraging equity securities for various purposes, including short selling, hedging strategies, and other investment activities. This degree of concentration in equity lending underscores the importance of equities in the overall securities lending landscape and signifies the prevalent role that equities play in facilitating market liquidity and efficiency.
In 2019, the Americas region had over 50% share in the global securities lending market.
The statistic “In 2019, the Americas region had over 50% share in the global securities lending market” implies that more than half of the activity in the global securities lending market was concentrated in the Americas region during that year. This statistic suggests that the Americas region played a dominant role in facilitating securities lending transactions worldwide, serving as a key hub for borrowing and lending securities for various purposes such as short selling, hedging, and arbitrage. The high market share indicates the region’s significant influence and participation in the global securities lending landscape, underscoring its importance in providing liquidity and facilitating efficient capital markets operations.
In 2019, beneficial owners had lent out $2.8 trillion worth of securities.
The statistic “In 2019, beneficial owners had lent out $2.8 trillion worth of securities” refers to the total value of securities that were borrowed by beneficial owners for various purposes, such as short selling or facilitating liquidity in the financial markets. Beneficial owners are individuals or entities who have ownership rights or benefits in a security, even though the security may be held in the name of another party. Securities lending is a common practice in financial markets where beneficial owners temporarily transfer their securities to borrowers in exchange for a fee or some form of collateral. The substantial value of $2.8 trillion indicates the significant scale of securities lending activities in 2019, highlighting the importance of this practice in facilitating market efficiency and liquidity.
Fixed income securities lending represented about 10% of the total lending in 2019.
The statistic “Fixed income securities lending represented about 10% of the total lending in 2019” indicates that a portion of lending activity in 2019 involved lending fixed income securities such as bonds or money market instruments. Specifically, around 10% of the overall lending transactions during that year involved borrowing or lending fixed income securities. This highlights the significance of fixed income securities in the lending market and suggests that investors or institutions were willing to engage in lending activities involving these types of assets. It also implies that fixed income securities played a notable role in the overall lending landscape in 2019, showcasing the diversity and complexity of financial markets.
The challenge of short squeezes affected the securities lending industry in the first quarter of 2021, when multiple heavily-shortened stocks experienced significant price appreciation.
In the first quarter of 2021, the securities lending industry was impacted by the phenomenon of short squeezes, where heavily shorted stocks saw their prices surge dramatically. Short squeezes occur when investors who have shorted a stock (betting on its price to decrease) are forced to buy back shares at higher prices to cover their positions as the stock’s price rises unexpectedly. This sudden increase in demand for the stock can lead to a rapid and significant price appreciation. The challenge of short squeezes during this period presented significant volatility and risk for those involved in securities lending, particularly for lenders holding short positions on these stocks.
In the first quarter of 2021, the securities lending industry saw a yearly increase of 15% despite the impact of Covid-19.
The statistic indicates that in the first quarter of 2021, the securities lending industry experienced a growth rate of 15% compared to the previous year, despite the challenges posed by the Covid-19 pandemic. This growth suggests that despite the economic uncertainties and market volatility caused by the pandemic, the securities lending industry has been resilient and continued to expand. The increase in securities lending activity could be driven by various factors such as increasing demand for securities for short-selling purposes, hedging strategies, or liquidity provision. Overall, the statistic highlights the industry’s ability to adapt to challenging circumstances and maintain a positive growth trajectory amidst a global crisis.
On a global scale, the balance of securities on loan decreased by about 7% in 2020 compared to 2019.
The statistic reveals that the total value of securities being lent out globally experienced a decrease of approximately 7% from 2019 to 2020. This could indicate a decrease in demand for securities lending or a decrease in overall securities market activity during 2020. A decrease in the balance of securities on loan could also imply reduced market volatility or risk appetite among investors. Factors such as economic conditions, regulatory changes, and market sentiments may have contributed to this decline. Overall, the 7% decrease in the balance of securities on loan on a global scale suggests a shift in market dynamics and investment behavior between the two years.
In 2020, the Asia-Pacific region saw a growth in securities lending revenue by almost 5% compared to 2019.
The statistic indicates that in 2020, the Asia-Pacific region experienced a nearly 5% increase in revenue generated from securities lending when compared to the previous year, 2019. This growth suggests a positive trend in the securities lending market within the Asia-Pacific region, indicating that more securities were being lent out for various purposes such as short selling, liquidity management, and hedging strategies. The increase in revenue could be attributed to a variety of factors, including a higher demand for securities lending services, favorable market conditions, or increased participation from financial institutions and investors operating within the region. This growth demonstrates a healthy market for securities lending in the Asia-Pacific region for the year 2020.
60% of central counterparties’ (CCPs’) revenues are from securities lending, showing its important role in CCP income.
The statistic that 60% of central counterparties’ (CCPs’) revenues are from securities lending highlights the significant and crucial role that securities lending plays in the income generation of CCPs. Securities lending involves the temporary transfer of securities from one party to another in exchange for a fee, providing various benefits such as facilitating short selling, market liquidity, and earning additional income for CCPs. With a large portion of their revenues coming from securities lending, CCPs rely on this activity as a key source of income, emphasizing the importance of efficient and effective securities lending practices in supporting the financial stability and operations of CCPs within the broader financial ecosystem.
Securities borrowers in the Americas dominate the market, accounting for about 72% of global borrow demand.
This statistic indicates that the Americas region holds a significant share of the global securities borrowing market, with approximately 72% of the total borrow demand coming from borrowers in the Americas. This suggests that borrowers in the Americas are the most active players in the securities lending market compared to other regions around the world. The dominance of securities borrowers in the Americas highlights the importance of this region in driving demand for borrowing securities, potentially influenced by a variety of factors such as the size and sophistication of financial markets, the level of market activity, and regulatory environments. Overall, this statistic underscores the substantial role that the Americas play in the global securities lending landscape.
Revenues from equities lending in the Americas region dropped approximately 29.3% in 2020 compared to 2019.
The statistic indicates that the revenues generated from equities lending in the Americas region experienced a significant decrease of around 29.3% in the year 2020 as compared to the previous year, 2019. This drop in revenues suggests a notable decline in the profitability of equities lending activities in the region during 2020, which could be attributed to various factors such as market volatility, economic uncertainty, and changes in regulatory environments. The decrease in revenues highlights the impact that external factors can have on the financial performance of equities lending in the Americas region and underscores the importance of monitoring and adapting to market conditions in the industry.
The beneficial owners based in the Americas lent out $1.811 trillion worth of securities in 2019.
The statistic indicates that beneficial owners located in the Americas collectively loaned securities valued at $1.811 trillion in the year 2019. This figure represents the total market value of securities that were temporarily transferred from the original owner (the beneficial owner) to another party, typically for the purpose of short selling or covering a short position. Securities lending is a common practice in financial markets where institutional investors and other market participants may lend out their securities in exchange for a fee, helping to facilitate market liquidity and provide additional sources of revenue for the beneficial owners. The substantial amount of securities lent out in the Americas during 2019 suggests a significant level of market activity and investor participation in the securities lending industry within the region.
References
0. – https://www.www.sifma.org
1. – https://www.www.issgovernance.com
