Multi-asset broker Saxo Bank has reported its financial results for the first half of 2019 this Thursday. The results came in weaker than the firm expected and were largely dragged down by low volatility, particularly in the foreign exchange (forex) markets, which accounts for a large part of the Group’s earnings.
During the first half of 2019, the Danish broker reported a negative net profit of DKK 139 million ($20.7 million). This is in comparison to a positive net profit in the first half of 2018 of DKK 153 million.
Operating income for the first half of 2019 was DKK 1.11 billion, which is also lower by 26.3 percent when measured against the DKK 1.51 billion operating income reported in the first half of last year.
“The negative net profit reflects primarily the headwind from external factors as volatility across most financial markets – particularly FX markets that account for a large part of the Group’s earnings – continued to be close to an all-time low during the first half of 2019,” the statement released by the broker said.
To remain competitive, Saxo Bank has decided to invest in lowering its prices significantly across asset-class. While this is expected to have a negative impact on short-term financial performance, in the long run, it is expected to fuel further growth.
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Saxo Bank records record client acquisition in H1 2019
Despite the fact that the financial results for the broker came in lower than anticipated, the company managed to achieve a record intake of new clients in the first half of the year. During the period, the direct client base grew by 17,497 new trading and investing clients. This translates to a 66 percent year-on-year uptick.
Commenting on the results Kim Fournais, CEO and founder of Saxo Bank said: “Despite headwinds in the industry, we remain fully committed to executing on our ambitious long-term strategy including record high investments in technology and our people. The key to success in this environment is scale and an optimal digital client experience.”
BinckBank acquisition to allow broker to achieve scale
Looking to the future, Saxo Bank has taken a solid step towards achieving scale, with the acquisition of BinckBank. As Finance Magnates reported, the transaction was closed earlier this month on the 7th of August.
By bringing BinckBank into the Saxo Group, the broker added 640,000 clients and approximately DKK 214 billion in client assets, marking a significant milestone in the history of Saxo Bank.
“The acquisition will allow us to further step up investments in the digital SaxoExperience to cater for our clients in the best possible way, which is key to long-term growth and profitability,” Fournais continued.
“In addition, we have seen a positive development in a number of leading indicators with a record intake of new clients in the first half of 2019, new highs in the onboarding and pipeline of high-profile wholesale partners as well as a significant increase in AUM.