Swissquote, a Swiss brokerage firm with a banking license, has unveiled an innovative stock lending program, broadening its range of financial services.
This announcement, made on Thursday, introduces an opportunity for customers to earn more than 5 percent interest on specific borrowed stocks.
Initially, Swissquote will limit the lending program to certain shares and exchange-traded funds (ETFs), with plans to expand to other asset categories in the future.
While some shares may yield an annual return exceeding 5 percent, the actual rate depends on demand, with a net client return rate of up to 1 percent per year for loaned securities.
Payouts will be disbursed to customers on a monthly basis.
Securities lending enables owners of physical securities to lend their shares to other market participants in exchange for a fixed return.
This service allows them to generate interest income from the lent stocks, in addition to receiving regular dividends.
Jan De Schepper, Chief Sales and Marketing Officer of Swissquote, commented on the development, saying, “Securities lending has long been an attractive option only for investors with large investments.
Following a successful launch in Luxembourg, Swissquote is now opening this opportunity for all its clients (except US clients) regardless of portfolio size.
They profit from convenient extra passive income from the securities they already own.”
Swissquote is making securities lending accessible to all its private clients through their bank accounts and the mobile app. Importantly, there is no minimum deposit requirement to participate in the program.
Clients wishing to partake in the lending program will need to explicitly register and accept an agreement, along with acknowledging associated risks.
Swissquote emphasized that securities will only be lent to reputable, top-tier banks and financial institutions.
These institutions often borrow securities to support the efficient functioning of capital markets, such as timely trade settlement and collateral needs.
This expansion of services comes on the heels of Swissquote’s impressive financial performance in 2023, during which it reported record-breaking financial numbers.
The company achieved a net revenue of approximately CHF 530 million for the year and anticipates a pre-tax profit of at least CHF 255 million.
Additionally, Swissquote recently introduced digital banking services, further enhancing its offerings to clients.