The Group’s 2013 earnings performance provides a fresh
demonstration of the company’s ability to evolve and
adapt to emerging circumstances by implementing
enhanced market access systems (e.g. co-location and
remote access services), encouraging the configura-
tion of more flexible market players such as the new
Non-Clearing Members and guaranteeing the highest
possible standards of trading quality at all times.
Despite growing international competition among share
trading centres, the Spanish stock exchange remains the
benchmark platform, accounting for the bulk of trading in
the Spanish companies whose shares are listed with BME.
Thanks to ongoing business diversification, in 2013
BME covered 114% of its cost base from revenue not
linked to volumes, marking growth year-on-year. This
statistic endorses the company’s strategy of bolstering
alternative revenue sources in order to hedge against
less favourable market environments while retaining its
ability to leverage favourable circumstances.
In 2013 revenue derived from trading related activi-
ties accounted for approximately 56.7% of total Group
revenue (38.2% of the total generated by equity trading),
almost seven points more than in 2012. This figure is the
aggregate of the revenue recognised by the Equities, Fixed
Income and Derivatives Business Units, whose earnings
performance is analysed in greater detail below. Adding
in the Clearing and Settlement Unit, whose business is
intricately linked to trading volumes, the‘trading’divisions
accounted for an aggregate 83.5% of consolidated 2013
revenue, again a higher weighting than in 2012.
The company is unwaveringly focused on cost control.
In 2013 operating costs increased by just 0.3% (less
than the 0.6% increase registered in 2012), evidencing
once again the company’s proven ability to fine-tune its
budget in line with forecast inflation (0.3% in 2013).
BME’s business model is predicated on four cornerstones:
(i) integration of the products it trades across its various
platforms into a single value chain; (ii) diversification of
underlyings; (ii) in-house technology development; and
(iv) nurturing the ability to react to emerging regula-
tory circumstances by offering customers solutions that
leverage existing resources.
One of the core components of the company’s strategy is
the prudent management of its resources, as is evident,
above all, in the cost-to-income ratio, which measures
costs incurred as a percentage of each unit of income
generate This metric stood at 32.2% in 2013, 13 points
below the sector average.
The Group also performed well compared to its rivals in
terms of its return on equity (RoE), which stood at 35.9%
in 2013, 24 points above the global sector average.
In parallel, BME reiterated its commitment last year to a
range of initiatives and alternatives designed to enable
the Spanish stock exchange to contribute to the devel-
opment and transparency of the securities markets and
to facilitate small andmedium sized companies’access to
financing. Against this backdrop, the SOCIMIs segment
was set up within the MAB, REGIS-TR was rolled out and
the alternative fixed-income market, MARF, was create In
addition, in compliance with EMIR segregation require-
ments, MEFF was decoupled from BME Clearing in order
to segregate this exchange’s central clearing house activ-
ities from its trading activities.
Robust operational gearing
103%
112%
118%
114%
2010
2011
2012
2013
90%
78%
106%
109%
105%
2006
2005
2007
2008
2009
Coverage of costs by revenue not linked to volumes
Revenue not linked to volumes
Revenue
Costs
Source: BME
33
Business Areas
Annual
Report 2013
BME
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