Swissquote, a broker with a Swiss banking license, has recently broadened its service offerings by launching a new stock lending program. This program, announced today, enables customers to earn over 5% on selected borrowed stocks.
Swissquote Introduces a New Stock Lending Program
At the outset, the Swiss-based brokerage firm will limit the lending to certain stocks and exchange-traded funds, with plans to expand to additional asset classes. The annual payout rate for some stocks may surpass 5%, depending on market demand. The net return rate for clients on loaned securities could reach up to 1% annually, with monthly distributions.
The concept of securities lending involves the owner of the stocks lending them to other market participants in return for a fixed yield. This arrangement allows stock owners to earn interest on their lent assets and continue receiving regular dividends.
Swissquote’s Chief Sales and Marketing Officer, Jan De Schepper, remarked: “Securities lending was traditionally a viable option mostly for investors with substantial holdings. However, after a successful initiation in Luxembourg, Swissquote is extending this facility to all our clients (excluding those in the US), irrespective of the size of their portfolio. This allows them to generate additional passive income from the securities they already possess.”
Swissquote has made securities lending accessible to all its private clients, available directly through their bank accounts and the accompanying app. Notably, there is no minimum deposit requirement to participate in this program.
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The brokerage emphasised that joining the program requires “explicit registration along with the acceptance of an agreement.” Customers need to be aware of the associated risks.
The firm assures that securities will only be lent to established, leading banks and financial institutions. These institutions often require borrowed securities to facilitate the efficient functioning of capital markets. For instance, they might borrow assets to assist in the timely execution of trades or use them as collateral.
This service expansion follows Swissquote’s remarkable financial performance in 2023, which saw the company achieve record-breaking financial metrics. It reported a net revenue of approximately CHF 530 million and anticipates a pre-tax profit of at least CHF 255 million.
