Monex Sees Strong Growth in Revenue for Q1

Despite low trading volumes due to muted volatility in the market, the firm still performed well overall.

Monex Group, Inc, a Tokyo-based financial services company, has announced its financial results for the first quarter of its fiscal year ending March 31, 2019. In the report, it showcased updates on the business’ developments in Japan, the US and the Asia Pacific region.

The results showed that despite low trading volumes and low volatility levels in the market, the firm still performed well overall. Its operations in Japan and the US reported strong increases in profits. However, the broker’s APAC region did lag behind. This resulted in a total operating revenue of $111.4 million (12.4 billion yen). This was up 12 percent year-on-year.

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In Japan, the company saw a continuous growth of net financial income. This is despite lower brokerage commissions which were a result of a decline in market trading volumes. However, systems-related costs were down in the first quarter, which helped boost income. Overall, the segment profit was $9 million (1 billion yen), an increase of two percent from the previous quarter.

Through its US Subsidiary, TradeStation Group, segment profit was $1.8 million (200 million yen). This was a significant increase of 183 percent when compared to the previous quarter. The increase in profit was largely due to new branding, pricing revisions, and streamlined onboarding tools. In fact, these have been the key drivers in the last five out of six quarters for the platform. Again, brokerage commissions were also lowered due to a low volatility market environment.

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In addition, due to TradeStation’s new branding and simplified offerings, the company was able to successfully attract casual traders/millennials. Not only did this increase their customer base, in the last 18 months new customers were on average four years younger than previously, the broker noted.

The disappointing segments for Monex 

Looking at the Asia Pacific region, the results are somewhat less encouraging. One positive aspect is that Monex Boom Securities remained profitable despite lower trading volumes. However, as Monex Securities Australia had just started its operations, it reported a segment loss of $81,100 (9 million yen).  Earnings for the region as a whole were down both quarter-on-quarter and year-on-year.

The firm’s crypto operations also delivered disappointing results. In April this year, Finance Magnates reported that Monex had acquired local cryptocurrency exchange Coincheck. Before the acquisition, the exchange encountered numerous troubles including the largest theft in crypto history. As a result, the exchange suspended its service in January this year. Following this, only existing customers could sell their cryptocurrency on the platform.

This significantly limited the revenue stream even after the acquisition. In addition, Monex had to invest money into the exchange to strengthen its cybersecurity and internal controls. As a result of all of these factors, the segment reported a loss of $2.7 million (300 million yen).

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