Revenues from the London Stock Exchange Group’s (LSEG) post-trade services increased by over a third during the first half of the financial year, with global investors shifting their operations to meet central clearing requirements.
Overall revenues from LSEG’s post-trade businesses were £213.7m, an increase of 34% year-on-year. Of which, revenue from its wholly-owned LCH.Clearnet business accounted for £165.7m, up 49%. The group’s Italian-based clearing, settlement and custody businesses, revenue grew by 6% on a constant currency basis to £48m.
LSEG said the rise reflected “growth in both OTC and list products clearing.”
Revenue from OTC derivatives clearing rose 26% to £68.6m, while non-OTC products (such as listed derivatives, cash equities, commodities and fixed income) grew 31% to £85.4m.
Overall revenue for H1 was £592.6 million, up 18% from the same period in the previous year.
However, LSEG expects revenues to decline from LCH in the second half due to the loss of cash collateral levels and commodity clearing revenues after the London Metal Exchange (LME) split from LCH to establish its own clearing house.
Following the full integration of LCH.Clearnet earlier this year, the LSEG plans to deliver £49m of cost reductions in 2015.
“Operating expenses have remained well controlled and we are seeing benefits of the cost reduction programme at LCH.Clearnet,” says Xavier Rolet, CEO, LSEG.
Rolet added that the group is set to complete its deal for Russell Investments ‘in the coming weeks’.
“Following completion, the all important US market will represent around one-third of our revenues,” he added. “The Group remains well positioned to develop across a wide range of businesses and markets.”