Strong first half performance
We are pleased to share that Euroclear’s financial performance in the first half 2018 has been ahead of our expectations, driven by strategic initiatives and continuing very supportive market conditions.
Strong revenue growth of 8%, benefitting from banking income as interest rates began to rise, combined with management’s focus on managing costs to deliver increased profitability from business operations. Business drivers continue to remain positive, and currently show no signs of abating.
First half operating profit rose 24% to €275 million, resulting in net EPS of €61.1 for the fi rst half – an increase of 32% compared to the prior year.
By way of reference, full year adjusted net EPS was €84.6 in 2017.
Management has also continued to make progress in the implementation of our three strategic priorities: strengthening European core, expanding growth initiatives and exploring innovation.
In the core, we are making headway in the CSDR authorisation process for each group (I)CSD, as well as the investments being made to enhance cyber security resilience.
We have seen further evidence of success in our growth initiatives. Progress in Collateral Management has been especially strong as we start to see client traction in GlobalCollateral Ltd (our joint venture with DTCC) as evidenced by winning the Financial News, Post Trade Initiative of the Year award.
We also received top honours in the Global Custodian Tri-Party Securities Financing survey. We look forward to the next important milestone in Initial Margin OTC derivatives migrations, with the next wave scheduled in September.
Data-driven services are an exciting area of green-field opportunity for Euroclear. We have launched a first pilot project with Algomi to develop Fixed Income Inventory Trading, and taken a strategic stake in this fintech company.
In addition, we have taken steps to optimise the group’s capital structures for recovery and resolution purposes in light of new regulatory requirements through successful issuances by Euroclear Investments SA (totalling €700 million) and Euroclear Bank (totalling €1 billion). Both transactions were oversubscribed, reflecting the attractiveness of our robust business model, the quality of our rating and confi dence in future financial performance.
More information and key highlights from the first half 2018 are available in this press release.