The UK subsidiary of Saxo Bank reported a 32% decline in annual profits for 2024 despite attracting thousands of new clients through aggressive pricing cuts, according to the financial statement published this week.
Saxo Capital Markets UK Posts £7.6M Profit, Down From £11.2M
Saxo Capital Markets UK Limited posted profits of £7.6 million for the year ended December 31, down from £11.2 million in 2023. Profit before tax fell to £10.4 million from £14.8 million the previous year.
Trading revenue dropped £3.5 million to £24.4 million, which the company attributed to reduced commission fees and lower market volatility throughout most of 2024. The firm cut prices on stocks, ETFs, options and futures while eliminating inactivity fees and minimum custody charges for retail clients.
"Lower pricing combined with low market volatility throughout most of 2024 resulted in a drop in the trading revenue for the company of £3.7m," the annual report stated.
The pricing strategy paid off in client acquisition terms. Saxo UK gained 3,600 newly trading clients in 2024, representing a 79% jump from 2,000 new clients in 2023. Client assets under management grew to £2.63 billion from £2.30 billion.
Key Performance Indicators Summary
Key Performance Indicators | 2024 | 2023 | Change |
Trading Revenue (£'000) | 24,444 | 27,973 | -12.6% |
Administrative Expenses (£'000) | 16,011 | 16,071 | -0.4% |
Profit Before Tax (£'000) | 10,398 | 14,811 | -29.8% |
Profit for the year (£'000) | 7,641 | 11,228 | -31.9% |
Shareholders' Equity (£'000) | 62,425 | 66,064 | -5.5% |
Return on Equity Before Tax (%) | 17% | 22% | -5pp |
Client Money Requirement (£'000) | 467,731 | 431,411 | +8.4% |
Client Assets under Management (£'000) | 2,626,894 | 2,302,919 | +14.1% |
Tier 1 Capital (£'000) | 54,394 | 66,153 | -17.8% |
Cost Income Ratio (%) | 66% | 57% | +9pp |
Source: Companies House, Saxo Capital Markets UK Limited
Revenue Mix Shifts
The company's revenue breakdown showed fees and commission income fell to £15.2 million from £19.6 million in 2023. However, net income from client deposits increased to £10.2 million from £9.1 million, reflecting higher interest rates during the period.
Shareholders' equity declined to £62.4 million from £66.1 million, partly due to an £11.3 million dividend payment during the year, up from £10 million in 2023.
Administrative expenses remained relatively flat at £16.0 million compared to £16.1 million in 2023, suggesting the company maintained cost discipline while investing in client acquisition.
In April this year, Saxo UK introduced a new Flexible ISA after experiencing a sixfold increase in demand for its Stocks and Shares ISA in early 2025.
Market Challenges
Saxo UK operates in an increasingly competitive online trading market where firms compete heavily on pricing. The company acknowledged that "uncertain or unfavorable macroeconomic or geopolitical conditions can impact UK’s operations negatively or cause demand for its products and services to decline."
The firm maintained a strong capital position with regulatory capital of £54.7 million against a requirement of £18 million. Its cost-to-income ratio rose to 66% from 57% in 2023, reflecting the revenue pressures from pricing competition.
Looking ahead, management said heightened market activity from recent macroeconomic and geopolitical events resulted in increased client trading activity in the first quarter of 2025, which could benefit revenues.
In March this year, Saxo Bank UK’s long-serving Chairman, Richard Balarkas, announced his departure after 10 years with the company.
