Monex Reports Consistent Losses From Crypto Activities in 2019

The broker's 2019 financial report also showed a decline in Japanese revenue but an increase in US profitability

Monex Group, the owner of TradeStation and a Japanese retail brokerage, released its financial results for the 2019 fiscal year.

The firm saw a minor decline in operating revenues last year.

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According to the firm’s report, over the course of the twelve months ending in March of this year, Monex Group raked in 47.4 billion yen ($420 million).

For the prior year, the equivalent figure was 49.2 billion yen ($440 million). That meant that, for this year, revenues declined by approximately four percent.

Japanese business slump

Interestingly, that decline was due to a decrease in revenue from Monex’s Japanese business operations.

Last year, the firm’s businesses in the east Asian nation reported total operating revenue of just over 29 billion yen ($260 million). This year that figure shrunk, by 11.3 percent, to 25.7 billion yen ($230 million).

The reason for that appears to have been a slump in trading volumes.

Rakuten Securities, another Japanese retail broker, reported a dismal first quarter performance this week and it’s difficult to imagine that low market volatility hasn’t also affected Monex over the past six months.

The broker attributed its Japanese losses to lower equities trading and noted that it had suffered a 1.7 billion yen ($15.2 million) impairment loss on fixed assets related to some trading technology.

Monex also revealed that its operating expenses for Japan remained almost the same last year.

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During the 2018 fiscal year, the firm spent 23.4 billion ($209 million) on various business expenses. For 2019, that number was just over 23 billion yen ($206 million).

All bright in America

Things were better for the broker in the US.

Operating revenue for the firm’s businesses in the Land of the Free was $174.6 million – an 11 percent increase on last year’s $157.3 million.

Operational expenditure grew, however, by almost $7 million, increasing from $148.8 million last year to $155.7 million this year.

Crypto struggles

Perhaps the most interesting part of the broker’s financial report were details surrounding its cryptocurrency activities.

Monex bought Japanese crypto exchange Coincheck in April of last year but had dabbled in digital assets prior to that.

But according to the company’s report, cryptocurrencies were a loss-making segment for the firm throughout the entire year. Breaking down its financial results by quarter, there wasn’t one three month period where the firm made money from digital assets.

In total, the firm lost 1.7 billion yen ($15.2 million) from its cryptocurrency offerings.

The firm said that it hoped to improve those figures and make itself profitable, by integrating Coincheck into its wider business operations.

On top of that, the firm has also released a new mobile application called ‘Cheeese’ that will act as an educational tool for investors. Users of the app answer cryptocurrency-related questions and can win bitcoin by doing so.

Still, with the market being fairly stagnant – even amidst a rise in the price of bitcoin – it’s hard to know whether those efforts will be successful.

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