Asset utilisation services to transform cost centre into profit centres
With markets bringing in significantly reduced returns over the last couple of years, investors have found maintaining their performance a tough task indeed. This has spurred the industry into a wider search for alternative ways to keep in line with required performance ratios. In this quest for enhanced performance, one particularly attractive tool is securities lending.
Over the years, securities lending has become one of the most important areas of the securities and banking industry. It is now a common practice for institutional investors and it makes up a growing proportion of their revenues. Securities lending is a low-risk activity. It provides significant additional return to beat the benchmark index and therefore reduces overall costs.
ABN AMRO is a major borrower of securities for proprietary utilisation and the structured products business. We have a state-of-the-art structured products team, specialized in legal, tax and regulatory issues, enhancing your securities borrowing and lending capabilities by taking a structuring approach to their needs. Acting as principal in all securities lending transactions, ABN AMRO assumes the counterparty risk and offers higher revenues to our clients. As such, ABN AMRO ranks among the most important principal actors in the securities borrowing and lending market.
We typically offer exclusive contracts to our counterparts. An exclusive contract provides lenders with a consistent supply and offers a higher fixed lending fee to borrowers. This option offers you the possibility to lend their portfolio for a fixed period (usually one year), for a fixed fee, implying a guaranteed return. Another option is to place the stocks of a portfolio in a lending pool. Stocks are lent out when opportunities arise in the market. Investors receive a fee over the period that the stocks of the portfolio are lent out.
Advanced technology is used for the administration of securities borrowed and lent, and for the calculation and settlement of income derived. Our system is fully computerised and handles the most advanced information flow in the field of securities lending. As a consequence we are able to offer you daily “mark-to-market” calculations, as well as monitoring of position maintenance, risk management, internal securities lending parameters, limits and collateral.