Saxo Bank posted it 2012 Annual Report today. For the year, net profit was DKK 81 million ($14.18 million) on operating income of DKK 2.97 billion ($520 million). The net profit figure fell 87% from 2011 levels, while operating income declined 15%. Saxo Bank blamed the drop in profitability to the decline in FX volatility during 2012. Despite the declines in trading revenues, assets under management hit a record high with client deposits hitting DKK 49 billion ($8.58 billion)., 48% than the DKK 33 billion ($5.78 billion) figure at the end of 2011. In addition, Saxo announced that 2013 has started out strong, with net profits from the first two months of the year surpassing those for all of 2012. Among other highlights, Saxo stated that mobile trading volumes doubled in 2012 versus 2011 as the firm saw a large uptake of its iOS trading apps. Also, its institutional API liquidity offering, Saxo Direct which was launched in early 2012 was achieving $3 billion/day in volume.
Saxo Bank sees record assets under management and retains profitability in difficult market conditions
12 March 2013
Saxo Bank, the online trading and investment specialist, saw an increase of nearly 50% in assets under management in 2012, growing to an all-time high of DKK 49 billion from DKK 33 billion in 2011. Total clients collateral deposits in 2012 increased almost 14% to more than DKK 40 billion. In a year marked by volatility and low trading volumes, this helped Saxo Bank to generate an overall net profit of DKK 81 million for 2012.
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Foreign exchange moved in tight ranges in 2012, with major currencies such as CHF and JPY impacted by pegging to the EUR and Bank of Japan intervention. These limitations naturally influenced clients’ trading behaviour. Saxo Bank’s EBITDA was DKK 606 million in 2012, remaining at a high level after decreasing 48% compared to 2011.
With market volatility in most asset classes remaining subdued throughout the year, operating income was DKK 2.97 billion, around 15% lower than in 2011. The Bank lowered the run-rate cost level to a level reflecting the market activity in November 2012, and operating costs for the Group ended at a similar level than in 2011 at DKK 2.51 billion. Saxo Bank’s solvency ratio is almost the same as last year at 13.5%, well above the legal requirement.
The founders and CEOs of Saxo Bank, Kim Fournais and Lars Seier Christensen, said in a joint statement:
“Saxo Bank’s performance in 2012 was unsatisfactory, but explainable with the overall economic climate. We have demonstrated that Saxo Bank is able to go through an economic recession and stagnation without losing profitability. Following the restructuring last year, we are now extremely well positioned for growth and profitability in 2013.
“Market activity is somewhat rebounding, and Saxo Bank’s net profit for the first two months of 2013 is already higher than for the full year of 2012. At the same time we are focusing even more on our core competencies and what brought us here in order to continue to lead the game. Embracing the latest information technology and developing innovative trading solutions is part of Saxo Bank’s DNA. Investors can rest assured that they continue to have the best tools, the broadest access to markets and the best performing multi-asset platform available when trading with Saxo Bank.”