Revenues reveal signs of recovery amid evolving demand dynamics
18 June 2026
Matt Chessum, executive director, equity and analytic products at S&P Global Market Intelligence, evaluates the underlying trends in EMEA鈥檚 securities lending market and the region鈥檚 move into a more 鈥榗onstructive phase鈥�
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Over the past 12 months, securities lending activity across the EMEA region has shown early indications of recovery, supported by gradually improving macro conditions, rising utilisation, and a noticeable increase in special balances.
While the backdrop has remained complex, characterised by geopolitical tensions, evolving central bank policy, and uneven economic growth, the data suggests a potentially more constructive environment for revenues, particularly in early 2026.
More importantly, this improvement has not been uniform. Instead, it appears to have been influenced by pockets of stronger activity across peripheral markets and an increase in higher-fee special lending, both of which have contributed meaningfully to overall returns.
A strong start to 2026 points to improved conditions
The first quarter of 2026 may mark an inflection point for EMEA equity lending. Revenues reached US$337 million, up 63 per cent year-on-year (YoY), supported by a 43 per cent increase in average balances to US$265 billion and a 14 per cent rise in fees to 50 basis points.
These changes are consistent with a combination of higher demand and a more supportive fee environment. Utilisation increased to 4.3 per cent, up 16 per cent YoY, reinforcing the view that a greater proportion of inventory is being actively deployed.
This trend builds on broader developments in the region. Lendable supply expanded significantly, rising 26 per cent YoY to US$4.9 trillion, which may reflect stronger asset growth and increased participation from beneficial owners. At the same time, rising utilisation points to borrowers becoming more active, with demand beginning to move closer to available supply. Taken together, these dynamics represent conditions that have historically been associated with revenue recovery following softer periods such as 2024.
From a macro perspective, this trend appears broadly aligned with stabilising economic conditions across Europe. Growth has remained modest but resilient, supported by consumer spending and public investment, while central banks have taken steps toward easing. Lower financing costs and improved liquidity conditions are factors that have historically been associated with increased risk activity, which may increasingly be feeding through into securities lending demand.
Peripheral markets contributing disproportionately to growth
A notable feature of the past year has been the outsized contribution from peripheral EMEA markets. Countries such as Greece, Portugal, Poland, Spain, and Turkey have delivered some of the strongest growth rates in the region during Q1 2026, across both revenues and fees.
鈥⒙燩oland recorded a 408 per cent increase in revenues, alongside a 338 per cent increase in fees, with average fees reaching 2.32 per cent, indicating a meaningful level of special activity.
鈥⒙燝reece saw revenues rise 409 per cent YoY, with fees climbing to 8.73 per cent, consistent with a more constrained supply backdrop and elevated borrow demand.
鈥⒙燩ortugal revenues increased 403 per cent, driven by a 442 per cent rise in fees, again highlighting the importance of
special balances.
鈥⒙燭urkey revenues grew 114 per cent, supported by fees of 1.92 per cent and utilisation of 18 per cent, the highest across EMEA.
鈥⒙燬pain delivered 108 per cent revenue growth, alongside a 41 per cent increase in fees.
These markets tend to share several structural features, including smaller lendable pools, more concentrated ownership, and sensitivity to local macro and political developments. This combination can lead to supply-demand imbalances, which are often reflected in higher fees and a greater proportion of special activity.
These dynamics may also be supported by broader economic trends. Southern European economies, including Spain, Greece, and Portugal, have seen relatively stronger growth contributions in recent periods, supported by domestic demand and fiscal programmes.
At the same time, markets such as Turkey and Poland have experienced greater volatility linked to inflation, currency movements, and policy developments, conditions that have historically been associated with increased trading activity and short demand. Greece was also recently readmitted into the MSCI developed markets index which is reflective of these broader trends and often a catalyst for stronger securities lending demand.
Specials activity continues to play an increasing role
A key contributor to the improvement in revenues has been the increase in special lending activity, which rose by approximately 23 per cent YoY in 2025. Specials, typically defined as securities commanding fees above 500 basis points, tend to make a disproportionate contribution to revenues despite representing a smaller share of balances.
The data provides several indicators of this trend:
鈥⒙燤aterial fee expansion across multiple markets, including Poland, Greece, Portugal, and Turkey.
鈥⒙燫ising utilisation across both core and peripheral regions.
鈥⒙燝reater dispersion in returns across countries, suggesting more targeted rather than broad-based borrowing demand.
From an industry perspective, this pattern is consistent with broader securities lending trends. Periods of macro volatility, geopolitical uncertainty, and policy shifts are often associated with more directional positioning and concentrated borrowing demand. Episodes such as trade-related market shocks or geopolitical developments have historically coincided with elevated short interest and increased specials activity.
This backdrop tends to favour lenders with more flexible programmes and access to harder-to-borrow inventory. It may also indicate a gradual shift away from a predominantly general collateral market toward one where incremental revenue is more closely linked to the ability to capture specials.
Core markets remain important anchors
While peripheral markets have contributed meaningfully to growth, core European markets continue to provide scale and stability. In Q1 2026:
鈥⒙燬weden generated US$64 million in revenue (+68 per cent YoY), with utilisation rising to 9.3 per cent.
鈥⒙燝ermany delivered US$42 million (+59 per cent), supported by higher fees and balances.
鈥⒙燜rance and the UK each contributed around US$40 million, with both markets seeing steady improvements.
These markets benefit from deeper and more liquid equity universes, which support consistent general collateral activity. However, fee increases in these regions, Germany (+28 per cent), France (+25 per cent), UK (+18 per cent), suggest that even core markets may be benefiting from tighter supply-demand conditions.
EMEA ETF lending activity tracking broader market trends
ETF lending activity in EMEA has also shown signs of recovery, broadly in line with the expansion of the underlying ETF market. Q1 2026 ETF lending revenues reached US$36.5 million, up 56.5 per cent YoY, with balances rising 59 per cent and utilisation increasing 26 per cent.
ETF lending continues to exhibit structurally higher fees than equities, with average fees of 1.49 per cent in Q1 2026, reflecting consistent demand for liquidity and hedging tools. Utilisation has increased to 4.6 per cent, indicating that ETF inventory is being actively utilised.
The role of ETFs in facilitating liquidity during periods of market stress has been widely observed, with trading volumes often increasing during volatility. In a securities lending context, this dynamic has historically translated into increased borrowing demand for both directional positioning and hedging strategies.
Linking revenue trends to macro developments
Changes in EMEA securities lending revenues are typically influenced by the broader macro environment. Several factors appear to have played a role over the past year:
鈥⒙燛asing monetary policy, stable economic growth, and fiscal support have contributed to improved financing conditions and risk activity but stable economic growth, underpinned by consumption and fiscal support.
鈥⒙燝eopolitical developments and trade uncertainty, often associated with increased volatility and positioning activity.
鈥⒙營nvestor rotation across asset classes and regions, which can drive hedging and relative value demand.
Collectively, these factors represent conditions that have historically been associated with more active securities lending environments, characterised by dispersion, volatility, and increased trading activity.
Outlook: Gradual improvement underway
Looking ahead, the data suggests that the EMEA securities lending market appears to be entering a more constructive phase, although this remains subject to broader market conditions. The combination of rising balances, higher utilisation, and increasing specials activity may provide a foundation for continued improvement in revenues.
Key themes that may persist include:
鈥⒙燙ontinued contribution from peripheral markets, where supply-demand imbalances may remain evident.
鈥⒙燨ngoing importance of specials as a contributor to incremental revenue.
鈥⒙燝rowth in ETF lending, supported by structural expansion of the ETF market.
鈥⒙燬ensitivity to macro developments, including interest rates, inflation, and geopolitical events.
While uncertainties remain, particularly around global trade and economic growth, the underlying trends across EMEA securities lending appear more supportive than in recent periods. Revenues are becoming less reliant solely on balance growth and increasingly influenced by the composition and quality of lending activity, representing a potentially evolving opportunity set for market participants.
While the backdrop has remained complex, characterised by geopolitical tensions, evolving central bank policy, and uneven economic growth, the data suggests a potentially more constructive environment for revenues, particularly in early 2026.
More importantly, this improvement has not been uniform. Instead, it appears to have been influenced by pockets of stronger activity across peripheral markets and an increase in higher-fee special lending, both of which have contributed meaningfully to overall returns.
A strong start to 2026 points to improved conditions
The first quarter of 2026 may mark an inflection point for EMEA equity lending. Revenues reached US$337 million, up 63 per cent year-on-year (YoY), supported by a 43 per cent increase in average balances to US$265 billion and a 14 per cent rise in fees to 50 basis points.
These changes are consistent with a combination of higher demand and a more supportive fee environment. Utilisation increased to 4.3 per cent, up 16 per cent YoY, reinforcing the view that a greater proportion of inventory is being actively deployed.
This trend builds on broader developments in the region. Lendable supply expanded significantly, rising 26 per cent YoY to US$4.9 trillion, which may reflect stronger asset growth and increased participation from beneficial owners. At the same time, rising utilisation points to borrowers becoming more active, with demand beginning to move closer to available supply. Taken together, these dynamics represent conditions that have historically been associated with revenue recovery following softer periods such as 2024.
From a macro perspective, this trend appears broadly aligned with stabilising economic conditions across Europe. Growth has remained modest but resilient, supported by consumer spending and public investment, while central banks have taken steps toward easing. Lower financing costs and improved liquidity conditions are factors that have historically been associated with increased risk activity, which may increasingly be feeding through into securities lending demand.
Peripheral markets contributing disproportionately to growth
A notable feature of the past year has been the outsized contribution from peripheral EMEA markets. Countries such as Greece, Portugal, Poland, Spain, and Turkey have delivered some of the strongest growth rates in the region during Q1 2026, across both revenues and fees.
鈥⒙燩oland recorded a 408 per cent increase in revenues, alongside a 338 per cent increase in fees, with average fees reaching 2.32 per cent, indicating a meaningful level of special activity.
鈥⒙燝reece saw revenues rise 409 per cent YoY, with fees climbing to 8.73 per cent, consistent with a more constrained supply backdrop and elevated borrow demand.
鈥⒙燩ortugal revenues increased 403 per cent, driven by a 442 per cent rise in fees, again highlighting the importance of
special balances.
鈥⒙燭urkey revenues grew 114 per cent, supported by fees of 1.92 per cent and utilisation of 18 per cent, the highest across EMEA.
鈥⒙燬pain delivered 108 per cent revenue growth, alongside a 41 per cent increase in fees.
These markets tend to share several structural features, including smaller lendable pools, more concentrated ownership, and sensitivity to local macro and political developments. This combination can lead to supply-demand imbalances, which are often reflected in higher fees and a greater proportion of special activity.
These dynamics may also be supported by broader economic trends. Southern European economies, including Spain, Greece, and Portugal, have seen relatively stronger growth contributions in recent periods, supported by domestic demand and fiscal programmes.
At the same time, markets such as Turkey and Poland have experienced greater volatility linked to inflation, currency movements, and policy developments, conditions that have historically been associated with increased trading activity and short demand. Greece was also recently readmitted into the MSCI developed markets index which is reflective of these broader trends and often a catalyst for stronger securities lending demand.
Specials activity continues to play an increasing role
A key contributor to the improvement in revenues has been the increase in special lending activity, which rose by approximately 23 per cent YoY in 2025. Specials, typically defined as securities commanding fees above 500 basis points, tend to make a disproportionate contribution to revenues despite representing a smaller share of balances.
The data provides several indicators of this trend:
鈥⒙燤aterial fee expansion across multiple markets, including Poland, Greece, Portugal, and Turkey.
鈥⒙燫ising utilisation across both core and peripheral regions.
鈥⒙燝reater dispersion in returns across countries, suggesting more targeted rather than broad-based borrowing demand.
From an industry perspective, this pattern is consistent with broader securities lending trends. Periods of macro volatility, geopolitical uncertainty, and policy shifts are often associated with more directional positioning and concentrated borrowing demand. Episodes such as trade-related market shocks or geopolitical developments have historically coincided with elevated short interest and increased specials activity.
This backdrop tends to favour lenders with more flexible programmes and access to harder-to-borrow inventory. It may also indicate a gradual shift away from a predominantly general collateral market toward one where incremental revenue is more closely linked to the ability to capture specials.
Core markets remain important anchors
While peripheral markets have contributed meaningfully to growth, core European markets continue to provide scale and stability. In Q1 2026:
鈥⒙燬weden generated US$64 million in revenue (+68 per cent YoY), with utilisation rising to 9.3 per cent.
鈥⒙燝ermany delivered US$42 million (+59 per cent), supported by higher fees and balances.
鈥⒙燜rance and the UK each contributed around US$40 million, with both markets seeing steady improvements.
These markets benefit from deeper and more liquid equity universes, which support consistent general collateral activity. However, fee increases in these regions, Germany (+28 per cent), France (+25 per cent), UK (+18 per cent), suggest that even core markets may be benefiting from tighter supply-demand conditions.
EMEA ETF lending activity tracking broader market trends
ETF lending activity in EMEA has also shown signs of recovery, broadly in line with the expansion of the underlying ETF market. Q1 2026 ETF lending revenues reached US$36.5 million, up 56.5 per cent YoY, with balances rising 59 per cent and utilisation increasing 26 per cent.
ETF lending continues to exhibit structurally higher fees than equities, with average fees of 1.49 per cent in Q1 2026, reflecting consistent demand for liquidity and hedging tools. Utilisation has increased to 4.6 per cent, indicating that ETF inventory is being actively utilised.
The role of ETFs in facilitating liquidity during periods of market stress has been widely observed, with trading volumes often increasing during volatility. In a securities lending context, this dynamic has historically translated into increased borrowing demand for both directional positioning and hedging strategies.
Linking revenue trends to macro developments
Changes in EMEA securities lending revenues are typically influenced by the broader macro environment. Several factors appear to have played a role over the past year:
鈥⒙燛asing monetary policy, stable economic growth, and fiscal support have contributed to improved financing conditions and risk activity but stable economic growth, underpinned by consumption and fiscal support.
鈥⒙燝eopolitical developments and trade uncertainty, often associated with increased volatility and positioning activity.
鈥⒙營nvestor rotation across asset classes and regions, which can drive hedging and relative value demand.
Collectively, these factors represent conditions that have historically been associated with more active securities lending environments, characterised by dispersion, volatility, and increased trading activity.
Outlook: Gradual improvement underway
Looking ahead, the data suggests that the EMEA securities lending market appears to be entering a more constructive phase, although this remains subject to broader market conditions. The combination of rising balances, higher utilisation, and increasing specials activity may provide a foundation for continued improvement in revenues.
Key themes that may persist include:
鈥⒙燙ontinued contribution from peripheral markets, where supply-demand imbalances may remain evident.
鈥⒙燨ngoing importance of specials as a contributor to incremental revenue.
鈥⒙燝rowth in ETF lending, supported by structural expansion of the ETF market.
鈥⒙燬ensitivity to macro developments, including interest rates, inflation, and geopolitical events.
While uncertainties remain, particularly around global trade and economic growth, the underlying trends across EMEA securities lending appear more supportive than in recent periods. Revenues are becoming less reliant solely on balance growth and increasingly influenced by the composition and quality of lending activity, representing a potentially evolving opportunity set for market participants.
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