Swissquote, which operates as a broker with a Swiss banking license, has expanded its services by introducing a stock lending program. Announced today (Thursday), the initiative will allow customers to earn over 5 percent on certain borrowed stocks.
Swisquote Offers Stock Lending
Initially, the Swiss broker will restrict lending to specific shares and exchange-traded funds. However, it has plans to add more asset categories to the program in the future. While the annual payout rate may exceed 5 percent for some shares, it's contingent on demand, with the net client return rate for loaned securities reaching up to 1 percent yearly. Customers will receive monthly payouts.
Securities lending allows holders of the physical securities to lend their shares to other market participants in exchange for a fixed return. Such services allow them to earn interest on the lent stock, as well as the usual dividends.
“Securities lending has long been an attractive option only for investors with large investments,” said Jan De Schepper, the Chief Sales and Marketing Officer of Swissquote.
“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.”
Keeping the Program Secure
Swissquote is introducing securities lending for all its private clients directly through their bank account and the app. Further, there will be no minimum deposit requirement to qualify for the program.
The broker further highlighted that participation in the program will require “explicit registration with the acceptance of an agreement.” Additionally, customers need to understand the associated risks.
“Securities are only lent to reputable, top-tier banks and financial institutions, who often borrow securities to ensure the smooth running of capital markets. For instance, they may borrow assets to support the timely settlement of trades or as collateral,” the official announcement explained.
The expansion of the services follows Swissquote's impressive financial performance in 2023, where it achieved “a set of record financial numbers.” Its net revenue for the year was reported at approximately CHF 530 million, while it anticipates a pre-tax profit of at least CHF 255 million. Additionally, it recently launched digital banking services.
