(Información remitida por la empresa firmante)
BRUSSELS, Feb. 1, 2024/PRNewswire/ — Results for the year ending 31 December 2023
Financial highlights
Euroclear continues to separate Russian sanction-related earnings from the underlying financial results and retain these profits until further guidance is provided on the distribution or management of such profits.
Underlying business income reached a record EUR 1,658 million, an increase of 3% year-on-year.
Underlying net profit increased by 63% to almost EUR 1 billion, driven by a robust business performance and a high interest rates environment.
Underlying operating expenses increased by 14% to EUR 1,290 million, on higher inflation and increased investments in line with our strategic ambition to develop digital capabilities and IT infrastructure. The impact of inflation on the group’s workforce andnon-payroll related costs accounted for an increase of around 5% compared to 2022.
Net interest earnings amounted to EUR 5.5 billion, of which EUR 4.4 billion relate to interests linked to Russian sanctions.
The Russian sanctions and countermeasures resulted in direct costs of EUR 62 million and a loss of business income of EUR 24 million.
Group impairments were recorded in 2023 totalling EUR 125 million, principally related to the impairment of part of the goodwill of our Swedish CSD. The harsher economic conditions and reduced volumes combined with an increase in costs are expected to persist, leading to reduced long-term projections. This has resulted in an impairment of EUR 100 million of the goodwill of the group’s Swedish CSD.
Euroclear achieved an underlying EBITDA margin of 57.4%, an increase of 9.7 percentage points compared to 2022.
Underlying earnings per share rose by 63% to EUR 312.1 per share, reflecting the continued increase in net profit.
The Board proposes to pay a dividend per share of EUR 210 in the third quarter of 2024. This represents an increase of 82% and maintains the pay-out ratio at 60% of the underlying earnings.
Lieve Mostrey, Chief Executive Officer of Euroclear Group, commented:
«2023 was another turbulent year, with geopolitical tensions impacting our macro-economic reality and the global capital markets. In times of complexity and market uncertainty, it is rewarding to know that our diverse client base continues to rely on us for safety and efficiency in processing and safeguarding their assets.
In 2023, we reached a record underlying business income of EUR 1,658 million and an underlying net profit of almost EUR 1 billion, driven by a robust business performance and a high interest rates environment. We also made solid progress in delivering on our strategic objectives, maintaining our focus on clients, while further developing ESG, data and digital capabilities, and continuing to grow our business internationally. Key achievements include the launch of the Digital Securities Issuance (D-SI) service, the successful connection of Euroclear Bank and Euroclear Finland to the European Central Bank’s T2S settlement system and the opening of a new Tech Hub in Krakow, allowing us to create 400 new jobs.
As we recently announced a leadership transition and the selection of Valérie Urbain as my successor, this is my last set of full-year results as CEO of Euroclear. I would like to take this opportunity to thank our colleagues across the entire group for their commitment and dedication in delivering another robust performance, servicing our clients and contributing to preserve the certainty, fluidity, and safety of our markets.»
Robust business performance in subdued market conditions
With a record underlying business income of EUR 1,658 million (+ 3% year-on-year), Euroclear continues to deliver growth despite subdued market conditions. In contrast with 2022, which was characterised by volatile markets following the invasion of Ukraine, 2023 saw market activity slightly decrease while equities valuations recovered. Fixed-income issuance performed well. The diversification of Euroclear’s business continues to provide resilience thanks to its subscription-like model as approximately three quarters of the group’s business income is decoupled from financial market valuation.
Eurobond and European assets performance resulted from solid issuance and partial recovery of equities valuations, in spite of lower levels of trading compared to last year in most markets.
The investment funds business also suffered from lower activity mainly impacting mutual funds. ETF investment remained strong.
Revenue emanating from the Collateral Highway increased despite reduced volumes for lending and borrowing.
Global and Emerging Markets performance remained solid amid interest in new, emerging markets.
In 2023, Euroclear progressed the renewed Group Strategy announced in 2022, laying the foundations for the next phase of Euroclear’s diversification and growth.
Embracing digital assets
In line with Euroclear’s aspiration to become a digital and data-enabled financial market infrastructure, a D²-FMI, it launched its new Digital Securities Issuance (D-SI) service in September 2023.
The service enables the issuance, distribution and settlement of fully digital international securities – Digitally Native Notes (DNN) – on distributed ledger technology (DLT). The inaugural DNN was issued by the World Bank, raising EUR 100 million to support its sustainable development activities. The DNN is automatically linked to the traditional settlement platform of Euroclear for secondary market operations, ensuring investors full access to liquidity.
Separately, in December 2023, Fnality, an international consortium of banks and financial institutions, including Euroclear, announced it had completed the first blockchain payments at the Bank of England. Fnality aims to bring central bank money in a digital tokenized form with near-real-time 24/7 settlement capability to allow banks to significantly reduce their intraday liquidity requirements.
Growing the funds business
Building on its acquisitions of MFEX and Goji, Euroclear has continued to enhance its service offering in investment funds with the launch of a new service targeting private market funds. Leveraging Goji’s capabilities and the FundSettle platform, the new service complements Euroclear’s existing money market, mutual and alternative fund offerings. The launch of the new service also follows the gradual inclusion of MFEX’s distribution and data services into the FundSettle platform.
To further streamline Euroclear’s funds offering and reflect its ambition to create a true one-stop-shop offering to clients across the full spectrum of funds products, Euroclear’s funds offering transitioned to a new brand name, Euroclear FundsPlace.
Euroclear also continued to deploy innovative services for fund distributors globally. In 2023, several clients from Europe and Asia chose Euroclear’s fund platform for the onboarding of their investment funds. Euroclear provides a one-stop-shop solution for fund distribution and execution services via its extensive network, allowing these clients to have access to more than 100,000 funds.
Forging stronger connections
Euroclear fully supports the need for integrated, deep and liquid capital markets within the European Union. As a common settlement platform for Europe, the European Central Bank’s TARGET2-Securities (T2S) system underpins this harmonised environment.
Euroclear Bank and Euroclear Finland successfully completed the connection to the European Central Bank’s T2S settlement system in late 2023. By joining this common infrastructure, the Finnish CSD can offer its users delivery-versus-payment settlement of securities and cash in euro and Danish krone central bank money.
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