Latest news with #ValerieUrbain
Associated Press
14-05-2025
- Business
- Associated Press
Euroclear reports strong business income growth in Q1 2025
BRUSSELS, May 14, 2025 /PRNewswire/ -- Results for the first quarter ending 31 March 2025 Financial highlights Strong underlying[1] business growth offsetting lower interest income Following the acquisition of a 49% stake in Inversis (see below), Inversis' results are consolidated as from March 1st, contributing to the group profit for €1.2 million through the share of results. The impacts of the Russian sanctions are detailed in the last section of this press release. Valerie Urbain, Chief Executive Officer of Euroclear, commented: 'We have made a strong start to 2025, reporting a 10% increase in business income driven by robust growth in safekeeping fees and settlement income, offsetting the anticipated decrease in interest income as rates have declined. Despite market volatility and uncertainty, our continued growth shows the strength of our diversified, resilient business model. We continue to closely monitor the impact of tariffs imposed by the US administration announced in early April, but the immediate direct impact on our business so far remains limited. Resilience and reliability remain the top priorities for our business and the volatile backdrop has underscored the strength of Euroclear's systems, which continue to perform highly efficiently and securely during periods of elevated trading volumes. As Europe's largest player in post-trade, continuing to drive market openness, innovation and efficiency is central to our approach and we have made strong progress against our strategic priorities during the start of 2025. Our partnership with Microsoft will further enhance client experience, support our strategic ambitions and drive new opportunities for business growth. We are increasingly leveraging technological evolutions such as AI throughout the business to transform markets and to build an open digital and data-enabled platform that promotes collaboration, drives efficiency and delivers value for all market participants.' Business performance The key operating metrics (end of period unless stated otherwise) demonstrate an excellent business performance during the period. Euroclear has reached record levels in settlement and safekeeping activities, with assets under custody growing for the tenth quarter in a row and closing the first quarter over the €41 trillion mark. The turnover increased by 23% compared to Q1 2024 thanks to high equity quotations, robust results in fixed income and increased settlement activity due to market volatility in the context of geopolitical uncertainty. The outstanding of Euroclear's Collateral Highway now surpasses to €2 trillion, while the funds depot is close to its peak of €3.6 trillion. Q1 2025 business milestones Strategic stake in Inversis Early March 2025, Euroclear successfully completed the acquisition of 49% of Inversis. This first transaction paves the way for the full acquisition of the Spanish company. This aligns with Euroclear's strategic vision to accelerate the growth of its one-stop-shop funds offering – Euroclear FundsPlace – and expand its presence in Southern Europe. Inversis' technology-led, diversified and resilient business model underpinned by continued growth perfectly complements Euroclear's existing funds business. New Singapore branch Further delivering on its Asia strategy, Euroclear Bank received approval for a branch licence in Singapore. Effective 1 February 2025, the new Singapore branch operates under a wholesale banking licence, enabling it to provide a broader range of activities. This change underscores Euroclear's long-standing commitment to the Asia Pacific market and its strategic focus on enhancing operational resilience while increasing proximity to clients in the region. New, innovative service for US Treasury repo market Euroclear launched a US Treasury Delivery-Versus-Payment (DVP) repo service. The service offers cash lenders similar operational efficiency for DVP repo transactions as triparty repo transactions. Repo collateral is held in a segregated account with the cash lender's custodian of choice. Electronic trading workflows on venues are integrated into the new service, making activities such as collateral allocation seamless for cash lenders and their counterparties. Strategic partnership with Microsoft harnessing cloud, data and AI Euroclear entered into a 7-year strategic partnership with Microsoft to transform Euroclear clients' experience and drive new opportunities for growth. The partnership further strengthens Euroclear's business ecosystem and technology infrastructure by leveraging Microsoft's leading technology, expertise and cloud services. This will enhance Euroclear's ability to create value for all market participants and unlock new opportunities at the core of the capital markets ecosystem. Microsoft will support Euroclear's strategic ambition in key growth areas like funds and client experience as well as its long-term vision to evolve into a Digital and Data-Enabled Financial Market Infrastructure. Russian sanctions impacts Financial impacts of the Russian assets Update on Russian sanctions and countermeasures Russia's invasion of Ukraine in February 2022 resulted in market-wide application of international sanctions. Euroclear considers the application of international sanctions as a key obligation. Therefore, well established processes are in place which have allowed the group to implement the sanctions while maintaining our normal course of business. As a result of the sanctions, blocked coupon payments and redemptions owed to sanctioned entities continue to accumulate on Euroclear Bank's balance sheet. At the end of March 2025, Euroclear Bank's balance sheet totalled €230 billion, of which €195 billion relate to sanctioned Russian assets. In line with Euroclear's risk appetite and policies and as expected by the EU Capital Requirements Regulation, Euroclear's cash balances are re-invested to minimise risk and capital requirements. In the first quarter of 2025, interest arising on cash balances from Russian-sanctioned assets was approximately €1.5 billion. In May 2024, the European Commission has adopted a new regulation about a windfall contribution applicable to CSDs holding Russian Central Bank assets with a total value of more than €1 million. The profits generated by the reinvestment of these sanctioned amounts dating from 15 February 2024 onwards are required to be contributed to the European Fund for Ukraine. After retention of a 10% share of the windfall contribution to comply with capital and risk management requirements, Euroclear paid approx. €3.5 billion to the European Fund for Ukraine for the 2024 fiscal year. Euroclear continues to act prudently and to strengthen its capital by retaining the remainder of the Russian sanction related profits as a buffer against current and future risks. Euroclear is focused on minimising potential legal, financial, and operational risks that may arise for itself and its clients, while complying with its obligations. As a direct consequence of the sanctions and countermeasures, Euroclear faces multiple proceedings in Russian courts. Since Russia considers international sanctions against public order, Russian claimants initiated legal proceedings aiming mainly to access assets blocked in Euroclear Bank's books, by claiming an equivalent amount in Russian Ruble and enforcing their claim in Russia. Despite all legal actions taken by Euroclear and the considerable resources mobilised, the probability of unfavourable rulings in Russian courts is high since Russia does not recognise the international sanctions. [1] Excluding Russian sanctions impacts [2] Based on estimated RWA of around €14.4 billion (of which around €6,3 billion of RWA are related to Russian assets) and CET1 capital of around €8.8 billion About Euroclear Euroclear group is the financial industry's trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden, Euroclear UK & International. Contact: Pascal Brabant, [email protected], +32 475 78 36 62 Photo - Photo - Logo - View original content to download multimedia: SOURCE Euroclear
Cision Canada
14-05-2025
- Business
- Cision Canada
Euroclear reports strong business income growth in Q1 2025
BRUSSELS, May 14, 2025 /CNW/ -- Results for the first quarter ending 31 March 2025 Financial highlights Strong underlying [1] business growth offsetting lower interest income Underlying business income for Q1 2025 reached a record €466 million, representing a 10% increase compared to Q1 2024. This growth was supported by robust business drivers, including fixed income issuance, increased equity quotations, and increased settlement activity due to market volatility related to geopolitical uncertainty. Underlying interest and banking income decreased by 10% compared to Q1 2024, to €255 million as expected given the declining interest rate environment. The impact was partially mitigated by increased cash balances. Underlying costs rose by 5%, broadly in line with expectations. This reflects investments in strategic development initiatives and inflation. Cost containment measures initiated last year continue to progress. As result of the positive operating leverage, business income operating margin improved from 23.4% in Q1 2024 to 27.1% in Q1 2025. Resulting adjusted net profit of €283 million decreased slightly by 1%. Adjusted Earnings Per Share remain stable year-on-year at €90. Euroclear Group retains a very strong capital position, comfortably above regulatory requirements with a Common Equity Tier 1 capital ratio of around 61% [2]. Following the acquisition of a 49% stake in Inversis (see below), Inversis' results are consolidated as from March 1 st, contributing to the group profit for €1.2 million through the share of results. The impacts of the Russian sanctions are detailed in the last section of this press release. Valerie Urbain, Chief Executive Officer of Euroclear, commented: "We have made a strong start to 2025, reporting a 10% increase in business income driven by robust growth in safekeeping fees and settlement income, offsetting the anticipated decrease in interest income as rates have declined. Despite market volatility and uncertainty, our continued growth shows the strength of our diversified, resilient business model. We continue to closely monitor the impact of tariffs imposed by the US administration announced in early April, but the immediate direct impact on our business so far remains limited. Resilience and reliability remain the top priorities for our business and the volatile backdrop has underscored the strength of Euroclear's systems, which continue to perform highly efficiently and securely during periods of elevated trading volumes. As Europe's largest player in post-trade, continuing to drive market openness, innovation and efficiency is central to our approach and we have made strong progress against our strategic priorities during the start of 2025. Our partnership with Microsoft will further enhance client experience, support our strategic ambitions and drive new opportunities for business growth. We are increasingly leveraging technological evolutions such as AI throughout the business to transform markets and to build an open digital and data-enabled platform that promotes collaboration, drives efficiency and delivers value for all market participants." Business performance The key operating metrics (end of period unless stated otherwise) demonstrate an excellent business performance during the period. Euroclear has reached record levels in settlement and safekeeping activities, with assets under custody growing for the tenth quarter in a row and closing the first quarter over the €41 trillion mark. The turnover increased by 23% compared to Q1 2024 thanks to high equity quotations, robust results in fixed income and increased settlement activity due to market volatility in the context of geopolitical uncertainty. The outstanding of Euroclear's Collateral Highway now surpasses to €2 trillion, while the funds depot is close to its peak of €3.6 trillion. Q1 2025 business milestones Strategic stake in Inversis Early March 2025, Euroclear successfully completed the acquisition of 49% of Inversis. This first transaction paves the way for the full acquisition of the Spanish company. This aligns with Euroclear's strategic vision to accelerate the growth of its one-stop-shop funds offering – Euroclear FundsPlace – and expand its presence in Southern Europe. Inversis' technology-led, diversified and resilient business model underpinned by continued growth perfectly complements Euroclear's existing funds business. New Singapore branch Further delivering on its Asia strategy, Euroclear Bank received approval for a branch licence in Singapore. Effective 1 February 2025, the new Singapore branch operates under a wholesale banking licence, enabling it to provide a broader range of activities. This change underscores Euroclear's long-standing commitment to the Asia Pacific market and its strategic focus on enhancing operational resilience while increasing proximity to clients in the region. New, innovative service for US Treasury repo market Euroclear launched a US Treasury Delivery-Versus-Payment (DVP) repo service. The service offers cash lenders similar operational efficiency for DVP repo transactions as triparty repo transactions. Repo collateral is held in a segregated account with the cash lender's custodian of choice. Electronic trading workflows on venues are integrated into the new service, making activities such as collateral allocation seamless for cash lenders and their counterparties. Strategic partnership with Microsoft harnessing cloud, data and AI Euroclear entered into a 7-year strategic partnership with Microsoft to transform Euroclear clients' experience and drive new opportunities for growth. The partnership further strengthens Euroclear's business ecosystem and technology infrastructure by leveraging Microsoft's leading technology, expertise and cloud services. This will enhance Euroclear's ability to create value for all market participants and unlock new opportunities at the core of the capital markets ecosystem. Microsoft will support Euroclear's strategic ambition in key growth areas like funds and client experience as well as its long-term vision to evolve into a Digital and Data-Enabled Financial Market Infrastructure. Russian sanctions impacts Financial impacts of the Russian assets Interest earnings from Russian sanctioned assets were €1,470 million, a 7.5% decrease from Q1 2024 due to gradual rate cuts. Future interest earnings will continue to evolve in line with future policy rates. As required by the EU windfall contribution regulation implemented in May 2024, Euroclear provisioned €944 million as windfall contribution for Q1 2025. The Russian sanctions and countermeasures resulted in direct costs of €22 million and a loss of business income of €9 million. Interest earnings related to Russian assets, which are subject to Belgian corporate tax, generated €360 million in tax revenue for the Belgian State. Update on Russian sanctions and countermeasures Russia's invasion of Ukraine in February 2022 resulted in market-wide application of international sanctions. Euroclear considers the application of international sanctions as a key obligation. Therefore, well established processes are in place which have allowed the group to implement the sanctions while maintaining our normal course of business. As a result of the sanctions, blocked coupon payments and redemptions owed to sanctioned entities continue to accumulate on Euroclear Bank's balance sheet. At the end of March 2025, Euroclear Bank's balance sheet totalled €230 billion, of which €195 billion relate to sanctioned Russian assets. In line with Euroclear's risk appetite and policies and as expected by the EU Capital Requirements Regulation, Euroclear's cash balances are re-invested to minimise risk and capital requirements. In the first quarter of 2025, interest arising on cash balances from Russian-sanctioned assets was approximately €1.5 billion. In May 2024, the European Commission has adopted a new regulation about a windfall contribution applicable to CSDs holding Russian Central Bank assets with a total value of more than €1 million. The profits generated by the reinvestment of these sanctioned amounts dating from 15 February 2024 onwards are required to be contributed to the European Fund for Ukraine. After retention of a 10% share of the windfall contribution to comply with capital and risk management requirements, Euroclear paid approx. €3.5 billion to the European Fund for Ukraine for the 2024 fiscal year. Euroclear continues to act prudently and to strengthen its capital by retaining the remainder of the Russian sanction related profits as a buffer against current and future risks. Euroclear is focused on minimising potential legal, financial, and operational risks that may arise for itself and its clients, while complying with its obligations. As a direct consequence of the sanctions and countermeasures, Euroclear faces multiple proceedings in Russian courts. Since Russia considers international sanctions against public order, Russian claimants initiated legal proceedings aiming mainly to access assets blocked in Euroclear Bank's books, by claiming an equivalent amount in Russian Ruble and enforcing their claim in Russia. Despite all legal actions taken by Euroclear and the considerable resources mobilised, the probability of unfavourable rulings in Russian courts is high since Russia does not recognise the international sanctions. [1] Excluding Russian sanctions impacts [2] Based on estimated RWA of around €14.4 billion (of which around €6,3 billion of RWA are related to Russian assets) and CET1 capital of around €8.8 billion About Euroclear Euroclear group is the financial industry's trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden, Euroclear UK & International.
Business Times
12-05-2025
- Business
- Business Times
Expect more investment flows between Europe and Asia amid US uncertainty: Euroclear CEO Valerie Urbain
[SINGAPORE] There will likely be more investment flows between Europe and Asia as volatility and uncertainty persist in the US, said Valerie Urbain, chief executive of financial market infrastructure services provider Euroclear. In Europe, there is a growing willingness to look for opportunities outside the US, which can potentially lead to increased collaboration with Asia. Meanwhile, Europe could also see a growing interest from Asian investors. 'At least in Europe, we are trying to defend the legal certainty, and to respect the rules,' Urbain said in an interview with The Business Times. Euroclear offers settlement and asset servicing worldwide on securities transactions. These include domestic and international bonds, equities, derivatives and investment funds. Its assets under custody amounted to 40.7 trillion euros (S$59.1 trillion) as at end-2024. Urbain noted that the company has seen 'tremendous' volumes of transactions in all directions since the US administration announced global tariffs. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up While many investors are maintaining a wait-and-see attitude during the 90-day pause, she expects there will be underlying structural changes, regardless of the outcome of negotiations. 'I believe that every country has started to realise that they were too dependent on too few countries, so there is this willingness for every country to reduce this dependency on very few partners,' she said. Urbain was speaking on the sidelines of the launch of Euroclear's Singapore branch, which will replace its representative office in the Republic. The branch – which was set up after Euroclear bagged a wholesale banking licence in Singapore in February 2025 – is part of the Belgium-headquartered company's strategy to expand in Asia, as it continues to see rising demand from the region. 'In the last three years, we're starting to see a lot more investment flows within Asian countries, and not necessarily with Europe in the middle,' she said. 'We also started seeing more investment flows between Asian markets and the Middle East.' In 2024, Euroclear made various moves to strengthen its footprint in the region. It acquired a strategic stake in Singapore-based digital market infrastructure operator Marketnode. It also took part in an initiative by the Hong Kong Monetary Authority to create a tokenisation framework. Urbain noted that the link between Europe and Asia goes both ways. For example, some 50 per cent of Euro bonds are issued in euros, with one-third bought by non-European investors, including those in Asia. Meanwhile, Euroclear's links with domestic central securities depositories in Japan, Hong Kong and Singapore has also channelled Western investors into domestic securities. On collateral services, Urbain said she has seen a lot of demand from institutional investors to use Asian securities as collateral to support their financing activity. With its new wholesale banking licence in Singapore, the CEO said Euroclear will be able to expand its existing activities, such as in operations – a role that used to be handled out of its Hong Kong office. The company is also looking to develop product management roles in Singapore so that it can create products which respond to local needs. Urbain noted that the Republic is unique for its position as a regional hub for asset management and wealth. While Euroclear continues to mainly service the banks, that often involves working with the wealth or asset management divisions of these lenders, particularly for the company's growing funds business. Even among international banks, their activities in Singapore are focused on wealth and asset management, Urbain said. Meanwhile, there is also the unique Singapore Inc branding. She said: 'You do see a full ecosystem that is very intertwined and geared towards developing Singapore as a financial centre.' Looking ahead, Euroclear will continue to develop links with local markets, including those in Indonesia, India and China, Urbain said. The CEO is also looking to further expand its funds business and develop Euroclear's Asian offices as a competent centre for mutual funds and the alternative funds. Urbain also said the company's collateral management service, which is prominent in Europe, is not yet fully leveraged in Asia. Meanwhile, she wants to support local players through partnership, which includes sharing its best practices and know-how to promote interoperability between Europe and Asia. 'Continuing to do what we do is fine, but I want to do more, because I want to make sure that we also service the flows which are within Asia,' Urbain said. 'But for that to be successful, we need to collaborate with local players.'
Yahoo
05-02-2025
- Business
- Yahoo
Euroclear continues to deliver strong results in 2024
BRUSSELS, Feb. 5, 2025 /CNW/ -- Results for the year ending 31 December 2024 Financial highlights Euroclear's underlying[1] business income and interest earnings reached record levels in 2024 Underlying operating income increased by 5% to reach €2,899 million. Underlying business income is up by 5% to €1,748 million, driven by strong settlement and safekeeping activities, with assets under custody reaching €40.7 trillion as of end December 2024. Underlying business income for Q4 2024 increased by 7% compared to Q4 2023, driven by strong performance in Eurobonds, European Assets, Global Emerging Markets and Funds. Despite a decreasing trend in interest earnings in the second half of 2024 due to interest rate changes, underlying interest income increased by 3% year-on-year to €1,152 million. Cost and margin evolution Euroclear reported several one-off events in Q4 2024, resulting in a total impact of €117 million. These include an initial dotation and the 2024 contribution to the newly created Euroclear Foundation (see below), the impact of the initial consolidation of Goji and Quantessence within the Euroclear Holding figures, a voluntary retirement incentive plan and a voluntary early retirement plan and the related tax impact. When excluding the above-mentioned events, underlying adjusted operating expenses increased by 3% year-on-year to €1,333 million, in line with the continued focus on cost mitigation and our 2-3% organic cost growth target. Q4 2024 underlying adjusted operating expenses increased by 5% versus Q4 2023, also reflecting exceptional HR and IT-related elements amounting to approx. €10 million. Adjusted business income operating margin for the full year 2024 improved as a result by 1.5 percentage points to 23.7%, in line with our focus to create positive operating leverage. Net profit and EPS evolution Underlying net profit increased by 6% to a record level of €1,038 million. When excluding the above-mentioned one-off cost events, resulting adjusted underlying net profit increased by 5% to €1,155 million. Underlying adjusted Earnings Per Share increased by 5% to €367, reflecting the continued increase in net profit. Capital position and dividend proposal Euroclear group retains a very strong capital position, comfortably above regulatory requirements with an underlying Common Equity Tier 1 capital ratio slightly above 60%[2]. The Board proposes to pay a dividend per share of €220 by the end of Q2 2025. This represents an increase of 5% and maintains the pay-out ratio at around 60% of the adjusted underlying earnings. The impacts of the Russian sanctions are detailed in the last section of this press release. Valerie Urbain, Chief Executive Officer of Euroclear, commented: "2024 was a year of record financial performance, underpinned by our increasingly diversified business model and driven by strong business income and sustained interest income. Our strategy and new management structure puts clients at the centre of our plans, and we continue to make progress against our key objectives. In 2024, we grew our funds business and European presence through the announced acquisition of Inversis in Spain. We also continue to support market adoption of digital assets by attracting new issuances on our D-SI platform while participating in important projects with industry partners to drive innovation across European post-trade. Our core activities continue to thrive. We have reached record levels in settlement and safekeeping activities, with assets under custody closing the year over the €40 trillion mark. The outstanding of Euroclear's Collateral Highway is now close to €2 trillion, while the funds depot also hit a new high of 3.6 trillion." Business performance The key operating metrics (end of period unless stated otherwise) demonstrate an excellent business performance during the 2023 FY 2024 YoY evolution 3-year CAGR Assets under custody €37.7 trillion €40.7 trillion +8 % +3 % Number of transactions 299 million 331 million +10 % +4 % Turnover €1,072 trillion €1,162 trillion +8 % +5 % Fund assets under custody €3.1 trillion €3.6 trillion +16 % +4 % Collateral Highway €1.67 trillion €1.9 trillion +15 % +1 % Underlying cash deposits (full year average) €23.7 billion €22.8 billion -4 % +3 % Euroclear's assets under custody reached a record €40.7 trillion, growing for the ninth quarter in a row, thanks to solid stock exchange performances and robust results in fixed income. Settlement volumes hit a new high due to sustained activity throughout the year. Boosted by the ETF activity, combined with the rise in equity markets, fund assets under custody reached the record level of €3.6 trillion. The Collateral Highway's outstanding continues to increase and is now close to its prior peak level. Business milestones Advancing the funds business Over the past years, Euroclear's funds offering has evolved rapidly thanks to acquisitions such as MFEX in 2021 and Goji in 2023. In 2024, major clients in Asia, Europe and the US, including Banque et Caisse d'Epargne de l'Etat Luxembourg (Spuerkeess), Blackrock, China Construction Bank (Asia), DBS Bank or ODDO BHF have selected Euroclear FundsPlace for the onboarding of their investment funds. Euroclear provides them with a one-stop-shop solution for fund distribution and execution services via its extensive network, allowing their clients to have access to more than 250,000 funds. In 2024, Euroclear acquired a strategic stake in IZNES, a pan-European funds marketplace based on blockchain technology. This partnership complements Euroclear's funds services in the French market and beyond as it continues to play an active role in the development of innovative funds distribution models. In July 2024, Euroclear announced the acquisition of a 49% stake in Inversis, a leading provider of global investment technology solutions and outsourced financial services with the intention to become the full owner of the Spanish company by end 2027. By acquiring Inversis, Euroclear aims to accelerate the delivery of its funds strategy and increase its pan-European coverage thanks to Inversis' significant presence on the Spanish market. In Asia, Euroclear acquired a strategic stake in Marketnode, a Singapore-based digital market infrastructure operator. By joining forces with Marketnode, Euroclear aims to participate in the setup of a key market infrastructure in Asia-Pacific designed to simplify the management of fund flows and reduce settlement times by using DLT technology. Reshaping traditional financial services Euroclear has an important role to play in bridging the gap between digital asset securities and the conventional financial landscape. In 2024, Euroclear made significant progress to become a digital, data-enabled Financial Market Infrastructure by welcoming the Digital Native Note (DNN) issued by the Asian Infrastructure Investment Bank on its Digital Securities Issuance (D-SI) platform. This marks the first of such digital issuance in USD for Euroclear and the first by an Asia-based issuer on its platform. Euroclear is also actively engaged in exploring the full potential of digital assets and participates in various DLT projects with market partners. Alongside Digital Asset and The World Gold Council, it successfully completed a groundbreaking pilot to tokenise gold, Gilts and Eurobonds for collateral management. With the support of Paris Europlace, Euroclear worked with a group of French banks around its D-SI platform and Banque de France's DL3S platform for Central Bank Digital Currency (CBDC) to issue the first Digitally Native Note (DNN) under French law and settled it in CBDC. Streamlined management structure Following the appointment of Valérie Urbain as CEO of the group, Euroclear redesigned the structure and composition of its top management team to accelerate strategy execution. A new, expanded Executive Committee composed of eight members ensures the representation of all the group's constituents in all key strategic decisions and a stronger focus on clients, business operations and people – both in Europe and internationally. Launch of the Euroclear Foundation to amplify social impact Euroclear aims to make a significant positive social impact in the locations where it operates. By establishing the Euroclear Foundation, Euroclear will seek to improve lives and support the next generation by working to eliminate pressing social and environmental issues. The Euroclear Foundation builds on the company's existing initiatives aimed at increasing its social impact. These include a group-wide volunteering programme, long-term community partnerships and a Matching Gift programme to match employee donations. Russian sanctions impacts Financial impacts of the Russian assets Following the implementation of the EU windfall contribution regulation, Euroclear provisioned €4 billion as windfall contribution in 2024. After retention of a 10% share of the windfall contribution to comply with capital and risk management requirements, Euroclear made a first payment for H1 2024 of approx. €1.55 billion to the European Fund for Ukraine in July 2024. A second payment for H2 2024 is expected to take place in March 2025 and should amount to approx. €2 billion. Interest earnings related to Russian assets, which are subject to Belgian corporate tax, generated €1.7 billion tax revenue. The sanctions and Russian countermeasures resulted in direct costs of €94 million and a loss of business income of €27 million. Gradual rate cuts have led to a gradual decline in interest income related to the Central Bank of Russia's assets in 2024 with the outlook for future interest earnings likely to continue to decline though dependent on future policymaking decisions. Update on Russian sanctions and countermeasures Russia's invasion of Ukraine in February 2022 resulted in market-wide application of international sanctions. Euroclear considers the application of international sanctions as a key obligation. Therefore, well established processes are in place which have allowed the group to implement the sanctions while maintaining our normal course of business. As a result of the sanctions, blocked coupon payments and redemptions owed to sanctioned entities continue to accumulate on Euroclear Bank's balance sheet. At the end of December 2024, Euroclear Bank's balance sheet totalled €212 billion, of which €183 billion relate to sanctioned Russian assets. In line with Euroclear's risk appetite and policies and as expected by the EU Capital Requirements Regulation, Euroclear's cash balances are re-invested to minimise risk and capital requirements. In 2024, interest arising on cash balances from Russian-sanctioned assets was approximately €6.9 billion. Such interest earnings are driven by the prevailing interest rates and the amount of cash balances that Euroclear is required to invest. Subject to Belgian corporate tax, these earnings generated €1.7 billion tax revenue for the Belgian State. As such, future earnings will be influenced by the evolving interest rate environment. Effective 15 February 2024, the EU Council adopted a Regulation requiring Central Securities Depositories (CSDs) holding reserves and assets of the Central Bank of Russia with a total value of more than €1 million to apply specific rules in relation to the cash balances accumulating due to restrictive measures. These CSDs, such as Euroclear Bank, should account for and manage such extraordinary cash balances separately from their other activities, should keep separate the net profit generated and should not dispose of these ensuing net profits (e.g. in the form of dividends to shareholders). In May 2024, the European Commission has adopted a new regulation about a windfall contribution applicable to CSDs holding Russian Central Bank assets with a total value of more than €1 million. The profits generated by the reinvestment of these sanctioned amounts dating from 15 February 2024 onwards are required to be contributed to the European Fund for Ukraine. After retention of a 10% share of the windfall contribution to comply with capital and risk management requirements, Euroclear made a first payment of approx. €1.55 billion to the European Fund for Ukraine in July 2024. A second payment is expected to take place in March 2025 and should amount to approx. €2 billion. Issued on 16 December 2024, the 15th EU sanctions package against Russia included a loss recovery mechanism which allows for the release of cash balances held by European CSDs under certain conditions. This derogation will enable CSDs to request competent authorities to unfreeze cash balances and use them to meet their legal obligations with their clients. Euroclear continues to act prudently and to strengthen its capital by retaining the remainder of the Russian sanction related profits as a buffer against current and future risks. Euroclear is focused on minimising potential legal, financial, and operational risks that may arise for itself and its clients, while complying with its obligations. As a direct consequence of the sanctions and countermeasures, Euroclear faces multiple proceedings in Russian courts. Since Russia considers international sanctions against public order, Russian claimants initiated legal proceedings aiming mainly to access assets blocked in Euroclear Bank's books, by claiming an equivalent amount in Russian Ruble and enforcing their claim in Russia. Despite all legal actions taken by Euroclear and the considerable resources mobilised, the probability of unfavourable rulings in Russian courts is high since Russia does not recognise the international sanctions. Euroclear Bank and Euroclear Holding are the two group issuing entities. The full year 2024 summary income statements and financial positions for both entities are shown below. The drop in FY2024 figures compared to FY2023 reflects the booking of the windfall contribution related to the Central Bank of Russia's (CBR) assets dating from 15 February 2024. The evolution of FY2024 figures compared to FY2023 reflects the increase in intragroup dividend. About Euroclear Euroclear group is the financial industry's trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency, and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives, and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation, and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International and Irish CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & International. [1] Excluding Russian assets impacts. [2] Post deduction of dividend relating to 2023 earnings, including 2024 underlying profit and based on estimated underlying RWA of around €7.5 billion. Taking into account a 60% dividend pay-out on the 2024 adjusted underlying profit, the CET1 ratio is 51%. Photo - - - - - - - - View original content to download multimedia: SOURCE Euroclear View original content to download multimedia:
