The Euroclear group of national and international central securities depositories (CSDs) says 2006 surpassed all previous performance records across all business activities, at the operational level.
Euroclear attributes its strong operational performance to benign market conditions and the attractive incentive of more than EUR 115 million in tariff-related reductions, rebates and other savings offered to clients in 2006. The ICSD also claims that “service improvements that increased efficiency and reduced both costs and risks for clients continued to attract an increasing flow of new and organic client business to the Euroclear group operating entities.”
“Euroclear’s platform consolidation and market-practice harmonisation programme has involved an unprecedented level of active interaction with clients and other stakeholders,” says Pierre Francotte, Chief Executive Officer of Euroclear SA/NV. “This has illustrated a noticeably more client-centric approach to the delivery of services across the Euroclear group, which is evident in our operating highlights. This is how we can give full meaning to our role as a user-owned, user-governed market infrastructure service provider.”
The entity-specific and combined results of the Euroclear group are as follows:
• Turnover, or the value of securities transactions settled, was EUR 451.7 trillion, an increase of 25% from EUR 361.4 trillion in 2005.
• The value of securities held for Euroclear clients at the end of 2006 was EUR 18.2 trillion, a 16% increase from the EUR 15.7 trillion recorded at year-end 2005.
• The number of netted transactions settled in the Euroclear group increased by 14% to 145 million in 2006 compared with 127 million in 2005.
• The combined daily value of collateral provision outstanding in Euroclear Bank and CRESTCo grew by 12% in 2006 to EUR 537.9 billion compared with EUR 481.9 billion at the end of 2005.
The breakdown by Euroclear entity was:
Euroclear Bank’s 2006 turnover surged 41% to EUR 218.8 trillion from EUR 154.8 trillion in 2005. CRESTCo experienced an 11% growth rate in 2006, with turnover expanding to EUR 144.8 trillion from EUR 130.6 trillion in 2005. Turnover grew 16% at Euroclear France in 2006, rising to EUR 84.3 trillion in 2006 from EUR 72.7 trillion in 2005. Turnover figures for Euroclear Nederland were EUR 3.5 trillion, about 6% higher than the EUR 3.3 trillion recorded in 2005. In 2006, Euroclear Belgium’s turnover was EUR 323 billion.
The breakdown in terms of securities held in custody was:
The value of securities held in custody by Euroclear Bank totalled EUR 8.1 trillion in 2006, a gain of 14% from the EUR 7.1 trillion recorded in 2005. More than EUR 46 billion represented net new business won from the other ICSD. Securities held for clients through CREST climbed 15% in 2006 to EUR 3.8 trillion from EUR 3.3 trillion in 2005. At Euroclear France, the 2006 total value of securities held was EUR 5.0 trillion, a 14% rise from last year’s EUR 4.4 trillion. Securities held in Euroclear Nederland increased 8% to EUR 954 billion in 2006 from EUR 881 billion in 2005. Securities held by Euroclear Belgium were EUR 265 billion in 2006.
The number of transactions settled (after netting) was:
In 2006, Euroclear Bank settled 34 million transactions, an increase of 26% from the 27 million transactions processed in 2005. CRESTCo settled 70 million versus 66 million, or 6% more transactions in 2006 than in 2005, Euroclear France settled 34 million transactions in 2006, 10% more than the 31 million processed in 2005 and Euroclear Nederland processed 3.8 million transactions in 2006, 23% more than the 3.1 million transactions processed the previous year. Euroclear Belgium processed 2.7 million transactions in 2006.
The daily value of collateral provision outstanding was:
Triparty collateral management deals outstanding at Euroclear Bank rose by 25% to a daily average of EUR 308.7 billion compared with EUR 246.0 billion at the end of 2005. CRESTCo processed the equivalent of EUR 229.2 billion in daily Delivery-by-Value (DBV) and money-market instrument repo instructions in 2006 versus EUR 235.9 billion at the end of 2005.
On the mutual fund side of the business, the number of fund transactions processed at Euroclear reached a record 6.9 million in 2006. The average number of transactions processed via its FundSettle service grew 79% in 2006 compared with 2005.
FundSettle now covers more than 33,000 offshore and domestic funds from 21 markets, including clients’ in-house funds, having added more than 3,000 funds in 2006. The number of active FundSettle accounts increased by 30% in 2006, while total client holdings in funds increased by 90% during the year. Euroclear describes FundSettle as Europe’s “only fully integrated fund-transaction platform, where order routing, settlement and custody processing is centralised in a single location.”
Euroclear recently acquired EMXCo, the UK mutual fund order routing system, which became part of the Euroclear group on 1 January 2007.
The 2006 results include those of Euroclear Belgium, which became part of the Euroclear group on 1 January 2006, for the first time.