Euroclear earned €3 billion from investing in frozen Russian assets
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The balance sheet of the international depositary Euroclear at the end of nine months of 2023 amounted to €164 billion. According to report depositary, Euroclear received about €3 billion in the form of interest income from investing blocked Russian assets.
The interest income from the blocked Russian assets was driven by two factors: high interest rates and the amount of money invested by Euroclear. The depository’s policy is that cash balances should be invested to minimize credit risk. Interest paid on reinvestment of cash balances is the net interest income received by Euroclear.
At the same time, it follows from the report that in January–September the depository incurred additional costs associated with monitoring compliance with sanctions against Russia. Euroclear valued them at €34 million. The Depositary noted that countermeasures applied by Russia led to a decrease in the activity of the Depository’s Russian clients, as a result of which Euroclear’s business income decreased by €18 million. The Depository’s Board of Directors expects that the growth of cash balances will begin to stabilize as reducing the rate of accumulation of blocked payments and repayments.
In March 2022, Euroclear suspended servicing the account of the National Settlement Depository, which is why some of the securities of Russian investors were frozen, and dividends and coupons on them stopped coming. The depository’s interest income from investing blocked Russian assets in the first half of 2023 amounted to €1.743 billion, in the first quarter of 2023 – €734 million, for the entire 2022 – €821 million.
Where and how ruble billionaires invest funds after freezing NSD’s account with Euroclear and Clearstream – in the Kommersant material “The Dashing Nine-Zeros”.
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