The London Stock Exchange (LSEG) has announced that a consortium of 11 major banks will invest in its Post Trade Solutions business with a 20 per cent stake.

Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, JP Morgan, Morgan Stanley, Nomura, Societe Generale and UBS will become shareholders in Post Trade Solutions, acquiring the stake for aggregate cash consideration of £170 million.

The deal will value Post Trade Solutions at £850 million.

Under the agreement, the consortium will cede a portion of the revenues generated by global clearing service for over-the-counter interest rate swaps SwapClear, which is part of LSEG.

LSEG's Post Trade Solutions provides risk management and capital efficiency tools for the non-cleared derivatives market with the aim of helping financial institutions simplify operations and reduce systemic risk.

The business generated revenue of £96 million and normalised Ebitda of £16 million in 2024, LSEG said.

As shareholders of Post Trade Solutions, the investing banks said that they will contribute strategically to the future growth of Post Trade Solutions.

As part of the agreement, three directors nominated by the consortium will join the business’ board of directors.

As part of the deal, LSEG will acquire a larger share of the revenues of SwapClear.

SwapClear is owned by the London Stock Exchange Group (LSEG) with investors including the banks’ consortium.

Previously, the founding members of SwapClear, including the investing banks, were entitled to 30 per cent of SwapClear’s revenue surplus through to 2035.

With the acquisition, LSEG will increase its share of SwapClear’s revenue surplus, reducing the banks’ share from 15 per cent in 2025 to 10 per cent from 2026 onward.

The move aligns SwapClear more closely with Post Trade Solutions in terms of governance and financial strategy, LSEG said.

Jim DeMare, co-president of Bank of America, said that the bank’s investment in Post Trade Solutions reflects its commitment to driving innovation that “enhances operational resilience and facilitates effective risk management.”

Olivier Osty, deputy chief operating officer of BNP Paribas, stressed that clearing and post-trade efficiency are structural enablers to robust financial markets.

“BNP Paribas is committed to invest in those areas, and this long-standing and successful partnership with LSEG is a perfect example of that,” continued Osty.

Troy Rohrbaugh, co-chief executive, commercial and investment Bank at JPMorgan, said that the investor’s previous partnership with SwapClear has been successful in growing and scaling the first-interest rate swaps clearing service into an established and profitable business.

“We see great opportunity for the many benefits associated with clearing such as risk management, standardisation and efficiencies, to be replicated by those trading uncleared derivatives,” he added. “This is an exciting opportunity for us to participate in and shape growth in that area through our investment in Post Trade Solutions.”

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