Deutsche Bank to Offer LCH Group's Clearing Service

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

Neal Pawa

Deutsche Bank to Offer LCH Group’s Clearing Service

April 10, 2019

Deutsche Bank has gone live as the first German bank to offer client clearing via CDSClear, LCH Group’s CDS clearing service.

CDSClear volumes and market share have been surging for more than 18 months. The service experienced an increase of 12% YoY in volumes to a record of €1.2 trillion in notional processedacross its CDS index and single names offering. End-user client clearing volumes increased by five times compared with the previous year.

Frank Soussan, Global Head of CDSClear
Frank Soussan

Frank Soussan, Global Head of CDSClear, commented: “We’re delighted that Deutsche Bank is the latest clearing broker to join our growing network of firms offering their clients the ability to clear credit derivatives at LCH. The German market is a major hub for credit derivatives, and we are pleased to welcome additional clients from Germany as our customer base continues to expand.”

Nic Maalouf, Global Head – Listed Derivatives and Clearing, Deutsche Bank, said: “We are committed to the derivatives clearing business and continuously review our offering to evolve and grow in line with the demands of our clients. Offering clients access to LCH CDSClear will provide them with more choice, and we are delighted to have completed this milestone.”

Asset management firms MEAG and Union Investment are clearing European and US credit default swaps at LCH.

Jan Reher, Senior Portfolio Manager Fixed Income, MEAG, said: “Central clearing enables us to benefit from enhanced risk management for our credit derivatives trading business. Connecting to LCH provides us access to a broad range of cleared US and European CDS products and we are pleased to have onboarded via Deutsche Bank.”

LCH

Christoph Hock, Head of Multi-Asset Trading, Union Investment, added: “Transparency is an important element of risk management, and accessing LCH CDSClear allows us to trade and clear our credit derivatives in a standardized manner. Within the European CCP landscape LCH has a wide range of credit derivatives available. On these grounds we are happy to have set-up the business relationship to LCH CDSClear to enhance delivering highest quality standards of best execution to our clients.”

In late 2018, LSEG entered into agreements with certain minority shareholders of LCH to acquire up to a further 15.1% of LCH’s share capital, which took its majority ownership to over 80%. The acquisition was valued at around €438m and was funded from cash and existing debt facilities.
LCH Group has recently partnered with capital markets software firm genesis to design, build and implement three new solutions: automating workflows for its ForexClear service, a CDS option electronic exercise platform for CDSClear, and member/client web portals for SwapClear.

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