After releasing its preliminary results earlier in April, one of the leading brokers in Poland, XTB, has published its financial report for the first quarter of 2019, ended March 31, 2019, this Friday.
As Finance Magnates previously reported, the broker revealed that the first quarter of this year continued to be weighed down by the product intervention measures implemented by the European Securities and Markets Authority (ESMA).
The most recent financial report released today shows that not only did the broker struggle in terms of revenue, as it previously revealed, but across the majority of its key financial indicators.
Operating income for the broker was €9.5 million for the first quarter. This is significantly less than the €27.2 million reported in the same quarter of the previous year. Specifically, it is down by around 65 percent.
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Although the Polish firm did manage to report a profit for the quarter, it is down quite substantially on a year-on-year comparison, as net profit fell by 98.7 percent from €14.2 million to €178,000.
Revenues Generated from Institutional Clients of XTB Falls for Currency CFDs
Taking a look at contracts-for-differences (CFDs), profit generated from currency CFDs was PLN 433,000 ($113,091). According to the report, the broker’s retail clients contributed PLN 30.9 million generated from transactions on currency CFDs. For the institutional segment, however, the Polish firm reported a loss of PLN 2.6 million.
With the implementation of ESMA’s measures, which cap leverage and restrict marketing practices, many brokers within the European Union (EU) have been ramping up their efforts to onboard more institutional investors that are not influenced by the regulation.
However, as highlighted in the report, the revenues generated from transactions in currency CFDs has fallen on a year-on-year comparison – both for the retail and institutional sector. In the first quarter of 2018, the retail operations raked in PLN 32.2 million, and the institutional operations contributed PLN 1.1 million.