Financial Highlights
– Operating income increased 8% compared to H1 2018, to EUR 725 million:
– Business Income rose 4% to EUR 565 million, driven by continued growth in assets under custody combined with strong market activity levels across business segments.
– Banking and Other Income increased 25% to EUR 160 million, boosted by client deposits and the benefit of higher US interest rates in H2 2018.
– Operating costs increased 6% to EUR 413 million:
– Decrease in YoY capitalisation of costs since launching our Finnish platform in September 2018
– Despite accelerating investment in strategic priorities, we expect full year cost growth at a level which delivers business income operating margin expansion.
– Net profit rose 13% to EUR 217 million (H1 2018: EUR 192 million).
– EPS also increased 13% to EUR 68.8 (H1 2018: EUR 61.1 per share).
– NAV per share rose to EUR 1319 from EUR 1220 at December 2018 (H1 2018: EUR 1190 per share), primarily due to the decision to postpone distribution of the normal 2018 dividend to an anticipated interim dividend in Q4 2019 following the group restructuring last year.
Key Operating Metrics
– Assets under custody reached more than EUR 30 trillion at the end June (H1 2018: EUR 29.2 trillion), an increase of 1% year-on year.
– Record number of netted transactions settled in the Euroclear group reached 118 million, an increase of 2% compared to the first half 2018 for a total value of EUR 411 trillion (4% above H1 2018).
– Euroclear’s Collateral Highway mobilised a record EUR 1.3 trillion, up 1% year-on year.
– Fund assets under custody increased by approximately 11% to EUR 2.2 trillion compared to year-end 2018.
Strategic Update
We remain focused on delivering our three strategic objectives to enhance our customer proposition: strengthening our network, growing our network and reshaping our network. Highlights from H1 2019:
– Good progress on CSDR authorisation process with Euroclear Belgium, France and Nederland receiving licenses from their respective regulators.
– Euroclear is well placed to continue its Irish securities settlement services after Brexit, having secured recognition for Euroclear UK & Ireland (EUI) by European Securities and Markets Authority (ESMA).
– Launch of the Collateral Portfolio Service enabling our custodian clients to offer a triparty collateral management solution to their buy side clients, making triparty a truly portable service offering, agnostic of the settlement and custody location.
– Euroclear’s EasyWay web interface is gaining traction. Over 240 customers have successfully migrated to the platform demonstrating the benefits of accurate, real-time data in performing tasks efficiently and managing operational risks.
– Over the past years, successfully onboarded clients as part of the new OTC derivatives margin requirements. Well prepared for the upcoming Wave 4 in September this year, and as buy-side clients join through Wave 5 in September 2020.
– Recent signing of two Memorandum of Understandings with the Egyptian Ministry of Finance and Saudi Arabia’s Securities Depository Centre to become ‘Euroclearable’.
– Broadening our funds ecosystem with Hong Kong Exchanges and Clearing Limited adopting the international ETF settlement model and Arbuthnot Latham & Co., Ltd, a UK private bank and wealth manager adopting CREST Investment Fund Service.
– Continue to take collaborative approach to innovation; Working with the European Investment Bank (EIB), Banco Santander, and EY on an end-to-end blockchain solution for the issuance and settlement of European Commercial Paper.
