By Mark McSherry
The global securities lending industry generated $9.89 billion in revenue for lenders in 2022, according to DataLend, the market data service of fintech EquiLend.
The figure represents a 6.6% increase from the $9.28 billion generated in 2021 and an almost 30% increase from the $7.66 billion generated in 2020.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $2.73 billion in revenue for 2022, a 3.1% decrease from 2021.
The five securities earning lenders the most revenue in 2022 were electric vehicle (EV) maker Lucid Group (LCID), followed by GameStop Corporation (GME), Beyond Meat Inc. (BYND), Sirius XM Holdings (SIRI) and lastly, Cassava Sciences Inc. (SAVA).
Those five securities in total generated $769 million for lenders over the course of 2022, a significant increase from the $413 million generated by 2021’s top five earners.
DataLend tracks daily market movements across more than 62,000 unique securities in the $2.5 trillion securities finance market.
According to DataLend, the improvement in lender-to-broker revenue over 2021 was primarily driven by the strong performance of corporate debt securities in the lending markets, which saw a $317 million increase in total revenue.
“Corporate debt fees were up 67.9%, and when combined with an 8.6% increase in on-loan balances, made for a banner year in the asset class,” said DataLend.
Rounding out the fixed income sector, revenue from government debt securities increased 9.8% year over year as higher fees offset a drop in on-loan balances.
In the equity lending market, North American securities outperformed other regions with an 11% increase in fees, helping to generate an additional $295 million in revenue compared to 2021.
Other regions did not fare as well as APAC and EMEA revenue declined 6.5% and 2%, respectively, due to lower fees.