IG Group’s APAC Revenue Challenges UK Dominance

IG Group (LON: IGG) recently published its six-month financial results for the period between June and November, during which it implemented a new decentralised operating model. The company is now generating more over-the-counter (OTC) revenue from APAC and the Middle East than from its home market, the UK and Ireland.

According to the interim results, the London-listed broker now divides its business into five geographically aligned divisions: UK and Ireland, APAC and Middle East, United States, Europe, and Institutional and Emerging Markets.

The Growth Is in APAC

From the UK and Ireland division, the broker generated £138.3 million in total revenue, an increase of 11 per cent year-on-year. APAC and the Middle East became its second-largest market, contributing £131.4 million.

However, in terms of OTC revenue, APAC and the Middle East surpassed the UK and Ireland, generating £129.2 million compared to £127.4 million.

Among the APAC markets, Japan led with £43.8 million in revenue, followed by Australia at £40.1 million and Singapore at £38.1 million.

IG’s revenue from the US market increased by 18 per cent to £77.3 million, while the growth rate in Europe remained steady at £63.1 million. The Institutional and Emerging Markets division contributed £41.6 million. Unlike other regions, IG’s offerings in the US are dominated by exchange-traded derivatives.

When it comes to revenue per client from OTC trading, IG generated £3,056 from each trader in the UK and Ireland, while clients in APAC and the Middle East contributed £2,479. European traders brought in £1,961 per client, whereas traders in the Institutional and Emerging Markets division outperformed all regions, generating £3,222 per client.

Singapore has always been only small market where IG benefited the most. However, the broker now stopped publishing per client revenue from the Southeast Asian city-state.

“In the Institutional and Emerging Markets division, trading revenue increased by 20%, with almost all of the revenue coming from OTC derivatives,” IG stated in its results. “Active clients reduced by 3%, offset by a 23% increase in revenue per client.”

Marketing Spends Declined

As previously reported by Finance Magnates, IG generated £522.5 million in total revenue and £451.7 million in net trading revenue during the first six months of the ongoing fiscal year. Its pre-tax profits for the period also rose by 30 per cent to £266.8 million.

Meanwhile, IG’s spending on marketing and advertising decreased by 4 per cent to £42.2 million. The group’s headcount also declined by 10 per cent, leaving it with 2,489 staff members.