Contracts for Differences (CFD) have transitioned from a niche product to a more mainstream one over the past decade, yet they still trail behind stocks and savings accounts in popularity, Omar Arnaout, the CEO of XTB, admitted during a recent earnings conference. Thus, considering the growing number of consumers seeking simple forms of capital preservation, XTB, a publicly listed brokerage (WSE: XTB), plans to introduce a new 'investment-savings' product by the end of the year.

XTB Seeks New Clients Outside the CFD Market

Arnaout has long reiterated that XTB's primary goal is to continually expand its customer base and secure a larger number of new accounts each quarter. To appeal to a broader audience, the broker aims to focus on products of particular interest to new potential clients.

"We aim to expand our product offerings to reach a broader range of clients," Arnaout stated. "New products are crucial for us to break the barrier of 40-55 thousand new accounts. Only new products, coupled with strong marketing efforts, can achieve this goal."

According to information disclosed during the earnings conference, the new product is set to debut this year. Arnaout suggested that despite generating significant turnover, CFDs remain niche products. The introduction of real stocks to XTB's offer has opened the company to an entirely new audience and a broader range of clients.

The company intends to leverage this trend and direct its services towards consumers looking for ways to protect their funds from heightened inflation, but who lack the time for active portfolio management.

"The product will be less investment-oriented and more savings-oriented. It will certainly be a much more passive product compared to what we currently offer," added the CEO at XTB.

Record Profits and Record XTB Share Price

XTB has set high standards for acquiring new clients. According to the Q1 2023 report, the broker attracted over 100,000 new customers, and their total client base grew 46.1% year-on-year to almost 704,000. Following a weaker Q4, the first quarter brought a record-breaking consolidated net profit of EUR 64.4 million, which is an impressive increase of 19.9% YoY.

In pursuit of new clients, XTB decided in April to introduce fractional shares to its offering, debuting first on the Romanian market, followed by the Czech, Slovak, and Portuguese markets. Arnaout revealed to Finance Magnates this week that the offer would also reach retail traders in Poland and Spain in the coming weeks.

"We are proceeding according to the planned schedule. I can reveal that the introduction of Fractional Shares to two additional markets – Poland and Spain – is just a matter of weeks," XTB's CEO told Finance Magnates.

In addition, XTB awaits approval from the national supervisory commission KNF for a share buyback. Upon approval, the broker will allocate 25% of last year's profit for the buyback, with 50% earmarked for dividend payout, confirming plans that were announced nearly two months ago.

In response to the positive Q1 results published on Wednesday, XTB shares gained 15% on the WSE on Thursday, rising to PLN 40.76, which is the highest level in its history. Since the beginning of the year, the broker's shares have gained 31%, while in the same period, competitor Plus500 lost 7% on the LSE and CMC Markets 20%.