LSE brushes off ‘challenging’ markets to hike income

The London Stock Exchange Group has shrugged off “challenging” markets to report a hike in first-quarter income as its clearing house, LCH, enjoyed surging growth.

LSE said income lifted 5% to £546 million in the three months to the end of March.

LCH saw income jump 17% to £182 million in the first three months of the year.

LSE said the first-quarter performance came against a “challenging market backdrop”, although it confirmed that the second quarter had so far been better for stock market listings.

It added that it saw “no discernible change to customers’ use” of the LCH service after EU authorities granted it “equivalence” in the event of a hard Brexit.

LSE chief executive David Schwimmer said: “While equity markets were slower due to macroeconomic uncertainty, we have seen an improved listing environment in the second quarter.

“The group is strategically well positioned to develop its growth opportunities further in the evolving macroeconomic landscape.”

The update comes ahead of the firm’s annual shareholder meeting on Wednesday, when chairman Sir Donald Brydon will resign and be replaced by Don Robert.

Its LCH business was boosted by its move to secure an updated SwapClear agreement with partner banks at the start of the year, which it said is estimated to deliver some £30 million of savings to cost of sales in 2019.

The group’s information services arm saw revenues climb 6% to £214 million, with revenues up 2% at its FTSE Russell data business, to £151 million.

But business revenues fell 9% in its capital markets business, to £97 million, due largely to low equity trading volumes.

Shares in LSE rose 2% after the update.