In line with the international expansion of its asset servicing business, CACEIS is extending its securities finance coverage into new financial centres and to a wider community of lenders and borrowers. Donia Rouigueb, CACEIS’ head of sales, securities finance and repo, speaks to Bob Currie about market dynamics, growth strategy and how recent acquisitions will turbocharge its offer.
CACEIS has engaged in an ambitious programme of expansion in recent years, reflecting a drive to complement organic growth with the continued expansion of its international coverage through acquisition. Senior management at the Paris and Luxembourg-based bank is emphatic that further consolidation is likely in the asset servicing sector and that CACEIS aims to be a primary driver of that consolidation in Europe and beyond.
While these ambitions extend across its asset servicing franchise, this growth creates opportunities for CACEIS’ securities finance division through the potential extension of its securities lending, funding and financing presence into new locations globally and the significant widening of its pool of asset owners and borrower counterparties.
With sharp changes in the macroeconomic environment post-Covid, securities finance clients are asking CACEIS to help them to transition away from an extended period of low interest rates and abundant liquidity, while negotiating an ongoing stream of regulatory deadlines and the need to deliver technical and digital upgrades to their businesses.
In a recent interview with SFT’s sister publication, Asset Servicing Times, CACEIS’ deputy CEO Joe Saliba highlighted that the goal through this acquisition strategy is to bring organisations together to become stronger, combining the bank’s expertise with other entities to create a new CACEIS that will be better positioned to define the future.
This is not just a feature of the bank’s recent history, illustrated by the purchases of RBC I&TS, Kas Bank and Santander Securities Services. Prior to that, CACEIS engaged in a series of purchases that strengthened its positioning for future expansion. This includes the 2007 acquisition of HVB Germany’s custody business from Unicredit and, in 2010, it bought the fund depository and custody business of HSBC France.
Against this background, it continues to be a buoyant period for securities lending. Rouigueb describes how, after an exceptional 12 months for securities lending during 2022, there was some anxiety within the industry that 2023 would fail to reproduce this rich pipeline of revenue generation. But 2023 has confounded the pessimists and has been another fruitful year for securities lenders.
According to S&P Global Market Intelligence, the first half of 2023 recorded the second-highest six-monthly securities lending revenues to date, raising US$7.02 billion, US$5.39 billion of which came from equities lending.
US equities lending has been an important contributor to these overall revenue numbers, generating an impressive US$2.59 billion which represents 48 per cent of global equity revenues [...]