#financial results #Q3 2025 #Brussels #Belgium #Euroclear

Euroclear's Strong Financial Performance in Q3 2025

In the first three quarters of 2025, Euroclear has demonstrated remarkable financial growth and stability despite facing various challenges resulting from market dynamics. The organization has recorded an impressive increase in underlying business income, reaching €1.4 billion, which marks a 7% increase year-on-year. This growth was fueled by exceptionally high deposit levels, steady settlement activity, robust flows in exchange-traded funds (ETFs), and substantial volumes in international fixed income markets.

However, it is noteworthy that interest and banking income did encounter a downturn, decreasing by 10% to approximately €800 million, primarily due to prevailing lower interest rates. Nonetheless, the company managed to exceed expectations in net interest earnings due to stabilized USD interest rates and elevated cash balances.

In terms of operational management, Euroclear showed resilience with adjusted operating expenses rising by only 3%, totaling €1,021 million. Strategic cost mitigation measures played a crucial role in countering the effects of inflation and wage growth pressures. Moreover, Euroclear's investment in Inversis, where it owns a 49% stake, yielded unexpected benefits, contributing €7 million to the results as it integrated its international settlement and custody services into Euroclear Bank.

Solid Growth Indicators

The operating margin for business income has seen a positive adjustment, now at 27.4%, reflecting effective cost control and growth within core business activities. Adjusted net profits have stabilized at €878 million, with an adjusted Earnings Per Share of €27.91.

Euroclear’s capital standings remain robust, comfortably positioned above regulatory requirements with a Common Equity Tier 1 capital ratio of around 61%, ensuring its capacity to weather market fluctuations.

A Look at Market Activities

Euroclear's operations for the initial nine months of 2025 continued to underline its key role in global capital markets. The organization confirmed that it processed 267 million transactions worth over €1 quadrillion, marking a 20% increase year-on-year and setting a new operational record. The total assets under custody surpassed €42.5 trillion for the first time, with all key operating metrics showcasing significant annual growth.

The turnover from transactions also reflected a notable rise, soaring nearly 20% to exceed €1 quadrillion, largely driven by strong performances in European fixed-income markets and increased settlement activities amidst heightened market volatility.

Technological Innovations

In a bid to modernize financial services, Euroclear has launched several innovative projects, such as collaborating with Banque de France on tokenizing Negotiable European Commercial Paper (NEU CP) using distributed ledger technology. This pilot project aims to create an interconnected wholesale Central Bank Digital Currency (CBDC) leveraging European Central Bank services.

The Eurobond market is also set to undergo digitization, with Euroclear Bank and Clearstream enabling Eurobond issuances in dematerialized formats starting from 2026, thus removing the necessity for paper certificates.

Euroclear’s commitment to sustaining market resilience is further emphasized through partnerships across Europe, including an agreement with Aegon UK for funds distribution services, enhancing the accessibility of mutual funds.

Navigating Global Challenges

However, Euroclear has not been without its challenges. The impacts of Russian sanctions remain a point of focus, with a reported €3.9 billion in interest earnings from affected assets, showcasing a 25% annual decrease. As part of compliance with EU regulations regarding windfall contributions, Euroclear has provisioned €2.6 billion for 2025, contributing significantly to the European Fund for Ukraine.

Euroclear maintains that its processes for handling international sanctions are robust, despite ongoing legal challenges in Russian courts regarding blocked assets. The company continues to remain vigilant while striving for compliance and protecting the interests of its stakeholders amid these turbulent times.

Conclusion

In conclusion, Euroclear's Q3 2025 review highlights a blend of strong growth, strategic innovation, and resilient operational capabilities. As the company adapts to the evolving financial landscape, its commitment to excellence and leadership in the market continues to shine through.