LSEG Divests 20% Stake in Post Trade Solutions to Major Banks

The London Stock Exchange Group (LSE: LSEG) is enhancing its partnership with key clearing clients by divesting a 20% stake in its Post Trade Solutions segment to 11 prominent global banks. This transaction, valued at £170 million, establishes an overall valuation for the unit at £850 million.

The participating banks include Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, Nomura, Societe Generale, and UBS. These institutions will each hold a stake in Post Trade Solutions, which provides risk management and optimization services for the uncleared derivatives sector.

In 2024, the Post Trade Solutions business generated £96 million in revenue alongside £16 million in earnings before interest, tax, depreciation, and amortization (EBITDA). As part of the agreement, LSEG will also enhance its revenue share from its flagship interest rate swaps clearing service, SwapClear. The surplus revenue share for banks from SwapClear is set to decrease from approximately 30% to 15% in 2025, then down to 10% in 2026.

LSEG will make an immediate cash payment of £1.15 billion, with a potential additional £200 million contingent on future growth metrics. This strategy is anticipated to elevate profitability across LSEG’s markets division, projecting an increase in earnings per share by about 2–3% in 2025, with further improvements expected in the subsequent year.

The banks will also be granted three board seats at Post Trade Solutions, giving them a direct influence over the unit’s strategic direction. The completion of this transaction is anticipated next year.

This initiative mirrors a wider trend within the financial sector, where exchanges and banks are cultivating closer alliances aimed at enhancing operational efficiency and fostering innovation in post-trade processes. By aligning the objectives of clearing clients with service providers, LSEG seeks to bolster its position as a front-runner in derivatives clearing and risk management services.