Euroclear Bank S.A./N.V.

The stable outlook reflects our view that Euroclear will maintain its robust business model, balance sheet, and profitability. We expect the group 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 rating 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 on Euroclear toward 2.5x could lead us to lower our rating. We consider an upgrade unlikely, given the already high rating and possibility for medium-term challenges to Euroclear's business model and competitive position arising from industry changes and geopolitical risks. In our base case, we expect that

...The Euroclear group is one of the world's largest providers of domestic and cross-border settlement services. The group held assets under custody of 40 trillion as of Sept. 30, 2024, reflecting a 9% increase year-on-year. In the first nine months of 2024, it processed 243 million transactions, equivalent to 850 trillion (up 5% 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. Furthermore, 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 2024, the group's underlying net profit...

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