Euroclear Bank S.A./N.V.

The stable outlook reflects our view that the Euroclear group's creditworthiness will remain resilient. We expect Euroclear to maintain a leading position in securities settlement and post-trade activities, combined with satisfactory profitability and a favorable capital structure. We could lower our ratings in the coming 12-24 months if Euroclear's very strong market position deteriorated markedly and unexpectedly. Although unlikely, a sizable debt-funded acquisition that raised our debt-to-EBITDA ratio toward 2.5x could lead us to downgrade Euroclear. We could also lower the rating on Euroclear Bank if we changed our view of its core status to the wider group, but we consider this scenario to be remote. We consider an upgrade unlikely, given the already high rating and possibility for medium-term

...The Euroclear group is one of the world's largest providers of domestic and cross-border settlements services. The group held assets under custody of 37 trillion as of Sept. 30, 2023, reflecting a 6% increase year-on-year. In the first nine months of 2023, it processed 224 million transactions, equivalent to 813.1 trillion (up 3% year-on-year). While we will continue to monitor developments in the area of decentralized finance, we currently see no significant risk that this will undermine Euroclear's role as a critical operator of national and international central securities depositories (CSDs) and provider of ancillary post-trade and financing services. Further, as part of Euroclear Digital Financial Market Infrastructure (D-FMI) strategy, the group intends to continue to improve its digital offering. Tailwinds from rising interest rates are largely responsible for Euroclear's elevated underlying profitability since 2022. In the first nine months of 2023, the group's underlying net profit...

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