London Stock Exchange Group (LSEG) Status Update summary

Business Overview and Growth Drivers

• Post trade activities span clearing, regulatory reporting, and new solutions, serving global clients across 62 countries and clearing 27 currencies and 14 sovereign debts.

• Growth is driven by increased debt issuance, deepening financial markets (notably in Asia), regulatory changes, and demand for capital and margin efficiency.

• The business has delivered strong revenue growth, with a 10% CAGR over the last 4-5 years and 19% over the last decade.

• Post trade now represents about 15% of group revenue and EBITDA, with a focus on both core FMI and expanding post trade solutions for uncleared markets.

• Continuous investment in new products, technology, and markets supports sustainable growth and resilience.

Risk Management and Resilience

• Clearing houses provide default protection, risk reduction, and operational efficiency, with robust risk models and a strong track record through market crises.

• Margin, default funds, and 'skin in the game' capital ensure resilience; no losses have ever exceeded the defaulting party's resources.

• Financial risk management and cyber resilience are core competencies, with gold-standard practices in credit, market, and liquidity risk.

• LCH has managed significant market events, including Lehman Brothers, Brexit, LIBOR transition, and the Russia-Ukraine crisis, without resorting to non-defaulting members' capital.

• Margin models have responded proportionally to market volatility, ensuring stability.

Business Model and Economics

• Revenue streams include member subscription fees, collateral management, transactional client fees, and profit share with founding members, with about 50% EBITDA margin.

• Clients benefit from optimized financial resource consumption, reduced operational complexity, and a high-value commercial model.

• Costs are concentrated in risk, technology, and operations, with ongoing investment for future growth and efficiency.

• LSEG's partnership model and deep industry expertise drive network effects and customer alignment.

• The group adapts by exiting legacy services and developing new offerings in response to evolving market needs.