Swiss inter-dealer brokerage group, Compagnie Financière Tradition issued its financial report for the first six months of 2014 today. The figures released today show considerable declines in both revenues and profits for Tradition during H1.
The group reported consolidated revenue of CHF 425.4 million for the first six months of 2014 against CHF 475.9 million in the first half of 2013, a decline of 7.8% in constant currencies. After a first quarter decline of 2.8% compared with the equivalent period last year, consolidated revenue fell 12.8% at constant exchange rates during the second quarter. Operating profit for the period declined 3.4% in constant currencies to CHF 26.8 million for a margin of 6.3% compared with 6.0% in the first half of 2013. Consolidated net profit was CHF 18 million compared with CHF 26.6 million in 2013 with a share of CHF 16.4 million against CHF 21.5 million in 2013, a decline of 22.2% at constant exchange rates.
Revenue from Tradition’s online forex trading platform for retail investors in Japan, Gaitame.com, declined by 37.2% at constant exchange rates compared with first half 2013, which the firm explained benefited from buoyant activity levels in the foreign exchange market that were not repeated in 2014.
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Tradition explained the declines by saying it had faced a challenging environment in the first six months, with low volatility on significant asset classes as well as a continued evolving market structure as a result of regulatory developments and related uncertainties, in particular regarding OTC derivative markets. In the context of the regulatory developments in the United States, the group said it has successfully developed the activities and positioning of Tradition SEF, especially through Trad-X, Tradition’s hybrid trading platform for interest rate swaps.
Since its launch, Trad-X has matched more than 18,000 separate orders in interest rate swaps, amounting to a notional matched of more than CHF 1.1 trillion (single count). The phasing in since February of products traded through SEFs in the United States progressed trading activities on the platform, with Trad-X achieving record electronic trading volumes for US dollar swaps consecutively in May and June. During the period, Trad-X successfully extended its offering to Euro Short End products.
Tradition said it also pursued the development of ParFX, a global wholesale electronic trading platform for spot forex, during the first half. The platform now counts 14 banks among its founding members, with the addition of two major participants in the global spot forex market in early 2014, enabling it to further expand its distribution network.