The London Stock Exchange Group (LSEG) has released its results for the first half of the financial year 2014/15, reporting positive results across the board.
For the six months leading up to 30 September, revenue was up 18 percent to £592.6 million, compared to £504.2 million for the same time in 2013, while total income, including net treasury income, increased by 13 percent from £567.1 million to £542.5 million.
Revenue for CC&G and Monte Titoli, the post-trade services in Italy, increased by 6 percent at a constant currency, but remained the same at a reported level. Clearing revenues were up 2 percent at a constant currency, with a 15 percent increase in clearing volumes.
These figures reflect the reduction of non-cash collateral in the Italian market, and the corresponding decline in associated fee income.
Settlement revenue rose 13 percent, and 19 percent at constant currency, while custody revenues rose 4 percent at a constant currency, but fell by 2 percent on a reported basis.
Italian assets under custody increased 3 percent to €3.4 trillion, but treasury income was hit by a move to secure investments for cash margin, leading to a reduction in yield of 45 percent to £15.5 million. This figure is expected to fall further due to the low-yield environment in Eurozone government bonds.
At LCH.Clearnet, post-trade services saw a revenue increase of 49 percent, or 30 percent on an organic and constant currency basis, due to growth in both over-the-counter (OTC) and listed products clearing.
OTC revenue rose 26 percent as it adjusted to an extra month’s figures compared to 2013. The interest rate swap (IRS) notional cleared increased 41 percent, and notional outstanding reduced by 5 percent, due to further compression after LCH.Clearnet introduced new services.
In addition to this, in the first nine months of 2014, SwapClear, LCH.Clearnet’s global clearing house, cleared $506 trillion and compressed $225 trillion through propriety and third-party compression services.
Revenue for information services was up 8 percent to £181 million, and up 9 percent on a constant currency basis. This growth reflects a good performance on the FTSE, with revenue from this up 10 percent, or 12 percent on a constant currency, to £92.7 million.
Revenue from real-time data reduced by 4 percent, reflecting a general decline in professional users in the UK. Revenue from other information increased 15 percent.
Exchange traded fund assets under management that are benchmarked to the FTSE grew 23 percent to $216 billion.
Overall, revenue increased 18 percent to £592.6 million, up from £504.2 million in 2013, and up 15 percent on an organic, constant currency basis. Total income rose 13 percent to £642.5 million, up from £567.1 million in 2013, and up 10 percent on an organic, constant currency basis.
LSEG’s operating expenses rose 6 percent, including £20 million of additional costs from LCH.Clearnet as a result of changes to revenue share arrangements for OTC clearing. The additional costs were partially offset, however, by £18 million of savings from LCH.Clearnet’s cost-reduction scheme.
The positive results are being attributed in part to favourable conditions in capital markets, good progress in information services and offsetting pressure on net treasury income with a move from cash towards secured investments.
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