PR84820

BRUSSELS, July 17, 2020 /PRNewswire=KYODO JBN/ --

Financial Highlights

•        Operating income increased 1% to EUR 730 million (H1 2019: EUR 725 million)

as a result of:

o        Business Income rose 13% to EUR 639 million (H1 2019: EUR 565 million),

driven by favourable market conditions and implementation of strategic initiatives

o        Banking and Other Income decreased 43% to EUR 91 million (H1 2019: EUR 160

million), as a result of interest rate cuts

•        Operating costs increased 3% to EUR 428 million (H1 2019: EUR 413 million):

o        Sustained focus on our customer proposition, modernising technology and

regulatory-driven initiatives

•        Net profit rose 5% to EUR 227 million (H1 2019: EUR 217 million), helped by

lower tax rate

•        EPS also increased 5% to EUR 72.0 (H1 2019: EUR 68.8 per share)

•        Strong balance sheet and capital position. Financial strength ensured by

disciplined risk management, limited leverage and prudent liquidity position

•        As previously announced, the Board intends to approve the payment of an

interim dividend in Q4 2020, unless it receives new guidance from regulators in

the context of the COVID-19 crisis

Key Operating Metrics

•        Assets under custody reached EUR 31.1 trillion at the end June (H1 2019: EUR

30.0 trillion), an increase of 3.7% year-on year

•        Record number of netted transactions settled in the Euroclear group of 141

million, an increase of 20% compared to the first half 2019 for a total value

of EUR 461 trillion (12% above H1 2019)

•        Euroclear’s Collateral Highway mobilised a record EUR 1.5 trillion (H1 2019:

EUR 1.3 trillion)

Business Update

•        In line with its reputation as a robust financial market infrastructure,

Euroclear responded to the immediate impact of the COVID-19 crisis,

implementing its business continuity plans to protect the health and safety of

its people, while delivering systems performance that ensured record volumes

were processed seamlessly

•        From a business continuity standpoint, we are able to operate successfully in

our current mode of extensive teleworking, which will continue in accordance

with local government guidelines

•        Created the Euroclear Solidarity Fund which made a donation of EUR 1 million

to charities in support of people impacted by the COVID-19 crisis. The donation

will be allocated to local charitable causes, such as hospitals and vaccination

research, in each of the main countries where Euroclear operates

•        Global financial markets continue to be shaped by the response of companies,

governments and other participants to the wide-ranging implications of COVID-19:

o   Settlement volumes returning to more normal levels after the exceptional

volatility recorded in March and April due to the pandemic, albeit the entire

period saw higher volumes compared to 2019

o     By facilitating primary issuance of government debt, required in response

to the crisis, fixed income assets under custody increased

o     Lower equity market valuations have impacted fees across several business

lines

o    Business income growth offset the financial impact of lower interest

rates, which policymakers implemented in their immediate crisis response

•        Continued progress in implementing its strategy to strengthen, expand and

reshape the global Euroclear network

o        Despite challenging conditions, the industry is working together to rapidly

and safely implement new technical requirements that support market-wide

compliance related to incoming European regulations

o        Continued progress on providing CSD services for Ireland in the context of

Brexit. Euroclear Bank received passporting authorisation in March and entering

next phase of migration project of Irish securities from Euroclear UK & Ireland

o        Further expansion of the international ETF issuance model to include Exchange

Traded Commodities (ETCs) and Exchange Traded Notes (ETNs), as well as an

increasing traction amongst global issuers for the international model over

domestic equivalents

o        Partnered with authorities in Turkey to create a Euroclearable link, giving

international investors unprecedented access to local government bond market

o        Cooperated with Clearstream Banking S.A. in the appointment of China

Construction Bank (Asia) Corporation Limited as common depository, safekeeper

and service provider for their international debt securities

o        Announced the launch of a multi-currency settlement service for Japanese

domestic bonds dominated in foreign currencies, further expanding Asia presence

Outlook

•        Exceptionally strong first half business income growth expected to subside,

with growth rates trending back towards historic through-the-cycle growth trajectory

o        Increased debt issuance by corporates and governments in response to the

impacts of the pandemic is expected to be a driver of safekeeping fees

o        However, a number of business lines are anticipated to be adversely impacted

by lower equity market valuations

o        Settlement volume expected to stabilise as market volatility subsides

•        Interest-related income severely impacted by rate cuts as well as lower

customer balances. We expect that ongoing lower interest rate environment will

result in yearly decline of approximately 60% in Banking and Other Income in

2020, compared to 2019 results

•        While we expect to meet target of business income operating margin of low to

mid 30% range this year, the material impact of lower interest-related income

will result in lower profitability in 2020, compared to 2019

Commenting on the results, Lieve Mostrey, Chief Executive Officer said:

“Euroclear delivered a resilient financial and business performance in the

first half. Our strategy is proving successful even in the context of an

unprecedented global crisis.

Our robust operating performance and business continuity in such unparalleled

circumstances has cemented our reputation as a safe and reliable infrastructure

partner for global financial market participants. I would like to thank the whole

Euroclear team for their hard work and commitment during this challenging time.”

Abridged Financial Statements

                                                             1st              Var                   1st           2nd        

                                                        half year    2020-2019        half year   half-year   Full Year

(in € million)                                       2020                                    2019       2019         2019

Consolidated Income Statement                                                

Business income                               638.6             73.5               565.2       580.2        1,145.40

interest & banking income                  83.1            -68.2              151.3       136.5           287.8

Other income                                         7.9             -0.4                   8.3        -6.1             2.3

                                                                                     0                        

Total operating income                      729.6               4.8               724.8       710.7        1,435.50

                                                                                      0                        

Administrative expenses                     -427.7         -14.4             -413.3      -406.8          -820.1

o/w Depreciation and amortisation     -35.5            -1.6               -33.9       -35.8           -69.7

Share of result in joint venture                   0             2.6                 -2.6        3.34            -0.7

Operating profit before

impairment and                                    301.9             -7                308.9       307.2           616.1

taxation                                                

Result for the period                           226.7           10.2                216.6       214.2           430.8

Consolidated Balance Sheet         

Shareholders' equity                        4,550.40        399.1            4,151.30     4,229.60       4,229.60

Debt                                                 6,447.50        637.3            5,810.10     6,107.10        6,107.10

Total assets                                    32,590.30        568.1          32,022.10    27,568.60     27,568.60

Per share information (in €)                                        

Net earnings per share                             72           3.2               68.8                68           136.9

Net asset value per share                1,445.70        126.8          1,318.90     1,343.80        1,343.80

Adjusted net asset value per share*1,165.80        126.6          1,039.20     1,063.30        1,063.30

* Adjusted net asset value per share excludes the amount of goodwill as well

as the amounts                                                

for contractual relationships and is based on the number of shares at the end

of the period                                                

Key performance ratios                                        

Assets Under Custody (€ Trn)               31.1          1.1             30                31.4            31.4

Netted Transactions (million)                141           23            118                 121             239

Collateral Outstanding

(€ billion end of                                   1483          198           1285                1316            1316

period)                                                

EBITDA (in € million)                                350           -5            355                 355             709

Business Income Operating Margin (%)   33%           6%            27%              30%             28%

CET1 ratio (%)*                                        40%           3%            36%               40%             40%

* Figures for first half 2020 are based on estimation                                                

Euroclear Bank Income Statement                                                

Net interest income                                 99.2        -75.3          174.5               156.2           330.7

Net fee and commission income            398.9           56          342.9               361.2           704.1

Other income                                           -0.6            1.1            -1.7                 -7.8              -9.5

Total operating income                           497.5        -18.2          515.7               509.6        1,025.30

Administrative expenses                       -282.5            0          -275.9              -259.6          -535.5

Operating profit before impairment and    215        -24.8          239.8                 250           489.8

taxation                                                

Result for the period                                157.8         -8.4          166.2               175.9           342.2

Euroclear Bank Balance Sheet                                                 

Shareholders' equity                             1,909.40         43.7        1,865.70    1,881.60        1,881.60

Long term debt                                     5,953.10          636        5,317.00    5,615.70        5,615.70

Total assets                                        29,163.60        344.2      28,819.30    24,324.00     24,324.00

Key performance ratios                                                

Business Income Operating Margin (%)        29%           2%             27%        31%             29%

CET1 ratio (%)*                                              40%           1%             39%        40%             40%

* Figures for first half 2020 are based on                                                

estimation                                                

Euroclear Investments Income Statement                                                

Dividend                                                            0           0.4                -0.4      216.5        216.1

Net gains/(losses) on non trading             -128.8       -294.6           165.8        49.4        215.2

financial assets at FVPL                                                

Other income                                                    2           -0.9                 2.9        1.8            4.8

Total operating income                             -126.8          -295             168.3     267.8        436.1

Administrative expenses                               -0.5          -0.1                -0.4       -0.4           -0.9

Operating profit before impairment and    -127.3        -295.1           167.9     267.4        435.2

taxation                                                

Result for the period                                    -95.6           -226           130.5     249.8        380.2

Euroclear Investments Balance Sheet                                                 

Shareholders' equity                                     669.8           -32            701.8     766.3        766.3

Long term debt                                         1,298.20           1.1        1,297.10   1,301.90     1,301.90

Total assets of which                               1,985.10         -44.8        2,029.90   2,117.30    2,117.30

Loans and advances                                     129.7          -9.7           139.4        129           129

Available-for-sale financial assets               249.7          42.5           207.2      246.6        246.6

Intercompany loans                                      904        -142.5        1,046.50   1,103.90        1,103.90

Note to editors

Euroclear group is the financial industry’s trusted provider of post trade

services. At the core, the group provides settlement, safe-keeping and

servicing of domestic and cross-border securities for bonds, equities and

derivatives to investment funds. Euroclear is a proven, resilient capital

market infrastructure committed to delivering risk-mitigation, automation and

efficiency at scale for its global client franchise.

The Euroclear group includes Euroclear Bank - which is rated AA+ by Fitch

Ratings and AA by Standard & Poor’s - as well as Euroclear Belgium, Euroclear

Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear

UK & Ireland. The Euroclear group settled the equivalent of EUR 837 trillion in

securities transactions in 2019, representing 239 million domestic and

cross-border transactions and held an average of EUR 30.1 trillion in assets

for clients.

For more information about Euroclear, please visit www.euroclear.com.

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Source:  Euroclear Holding, Euroclear Investments, Euroclear SA/NV