- Strong performances of North America and APAC equities, global corporate debt drove revenue to historic high
- AMC stock generated $511 million in revenue for lenders, most of any security globally
The global securities finance industry generated $10.7 billion in revenue for lenders in 2023, according to DataLend, the market data service of fintech EquiLend. The figure represents a record high since DataLend began recording annual revenue a decade ago. The $10.7 billion amounts to an 8.6% increase from the $9.89 billion lenders made in 2022 and a 16% increase from 2021’s $9.28 billion.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $2.86 billion in revenue for 2023, a 4.4% increase from 2022.
According to DataLend, the increase in lender-to-broker revenue over 2022 was primarily driven by strong borrower demand for equities in North America and APAC, which saw a $492 million and a $228 million increase in revenue respectively. A 9.6% increase in fees to borrow North American equities and an 11.3% increase in on-loan value for Asian equities drove global equity lending revenue up by 8.2% over 2022. EMEA equity lending revenue fell by 8.1% as a 19.3% drop in loan value offset a 14.4% increase in average fees to borrow.
A 25.3% increase in fees to borrow corporate debt resulted in a breakout year for the asset class. Lending revenue rose 31% year-over-year to $915 million.
Government debt lending revenue was more muted, increasing by just under 1% year over year as higher fees offset a drop in loan balances.
The five securities earning lenders the most revenue in 2023 were AMC Entertainment (AMC), followed by Sirius XM (SIRI), Beyond Meat Inc. (BYND), Lucid Group (LCID) and Nikola Corporation (NKLA). The five securities in total generated $1.1 billion for lenders over the course of 2023, a significant increase from the $769 million generated by 2022’s top 5 earners.
