Breaking: IG Group Reports 20% EU Revenue Drop Since ESMA

IG Group is moderately affected by a 20% decline in revenue from Europe and the UK.

IG Group Holdings (LON:IGG) has just reported on the outcome of the first half of fiscal 2019. The company is guiding the market in a pre-close trading update before the LSE opens today.

For the first half of fiscal 2019, which ended on November 30, IG Group Holdings (LON:IGG) reports a revenue decline of six percent year-on-year. Considering the record-setting fiscal 2018, the result is positive.

IG Group also reported on the impact from the new European regulatory measures. The brokerage reports a ten percent year-on-year global revenue decline for the four months between August and November.

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Looking at a regional level, revenue in the same four-month period in the UK and EU is projected to be 20 percent lower. The offsetting increase in APAC and other non-ESMA region countries is expected to be nine percent higher.

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Professional Clients Share of Revenues

The figures above are underlying changes which are adjusting for the 1,200 clients who previously contracted with the UK entity and have chosen to move outside of the ESMA region.

“The number of clients in the UK and EU who have elected to be classified as professional continued to increase during the period. Around 70% of UK and EU revenue in the four months since all the measures were introduced has been generated by professional clients,” IG Group said in a statement.

The number of new clients from APAC and non-ESMA regions remained more or less constant when compared to last year, 6,400 vs. 6,361 last year. Looking at the ESMA-regulated region, only 8,200 new clients signed up, when compared to 11,666 a year ago. 

The company is highlighting its BaFin license in Germany which is supposed to help it to continue offering its services in the EU after Brexit. IG Group is also looking forward to beginning to offer trading services in the USA, where its subsidiary has been approved as a member of the National Futures Association (NFA) and is now registered to operate as a Retail Foreign Exchange Dealer (RFED).

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