CMC Markets Institutional Business Spikes 45%, H1 Nets Record Income

The company’s institutional push is paying off as the value of client trades increase 91 percent.

CMC Markets has just published its interim results via the London Stock Exchange RNS. During the six months that ended on September 30th, the company is announcing an increase in net operating income to £89.6 million, which is 19 percent higher when compared to a year ago.

Looking at the institutional business of CMC Markets, it is one of the strategic growth drivers. Net revenues increased 45% year-on-year to £15.0 million ($20 million). The company’s proprietary API access with direct market access (DMA) connectivity are expected to continue driving future growth. Trading volumes of the institutional unit increased by 91 percent when compared to the prior year.

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Commenting on the firm’s performance, the CEO of the brokerage, Peter Cruddas, said: “Net operating income was a record for the first half and a reflection of our continuing focus on high-value clients.”

Overall Performance

The company also posted an impressive increase in its revenue per client metric. The figure stood at £1,814 ($2,417) which is higher by 22 percent when compared to the previous year. The annual increase in operating costs for the first six months of the fiscal year was up 5 percent to £59.3 million ($79 million), driven by higher staff expenses and discretionary performance incentives.

Profits before taxes rose 58 percent to £29.8 million (£39.7 million) with client assets totaling £322.5 million ($429.8 million), compared to £283.3 million in the first half of fiscal 2017.

In the established markets for CMC Markets which are the UK, Australia, and Germany, the company posted growth in net revenues of 16 percent to £60.4 million. The number represents 71 percent of the total as the value of client trades up 25%, demonstrating the results of the company’s focus on high-value clients.

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One of the fastest growing offices of the firm was in Poland, where the office of CMC Markets posted a 107 percent increase in trading volumes and 96 percent in client numbers.

The company’s Shanghai office opened in October 2017 and CMC Markets is looking forward to expanding in the region.

Future Developments

CMC Markets is stating that it is on track to deliver an HTML5 platform roll out and has cemented its Australia stockbroking partnership with ANZ Bank for September 2018. The upcoming regulatory requirements in the EU are also highlighted by the firm.

“The industry review of the industry could include leverage caps, negative balance protection, restrictions on marketing and changes to client on-boarding,” the earnings report outlines.

Cruddas adds a comment on the matter: “What is clear from the consultation process is that the regulators are concerned with the level of client losses, and inadequate appropriateness and on-boarding checks. We fully support increased regulatory oversight of the industry and believe that CMC’s business model will benefit from such proposed changes.”

CMC Markets also is making public that it already has planned for the post-Brexit environment and has plans to ensure it has access to passporting rights after March 2019.

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