Trading volumes, new account openings, as well as top and bottom lines of earnings at Polish FX brokerage XTB, have been off the charts so far this year as a record number of first-time investors joined its platform during the Covid-19 chaos.
Compared to a period of weak growth in the H1 2019, XTB has seen around a six-fold surge in its total operating revenue, which jumped to $137.0 million (PLN 518 million) from the PLN 88 million the company posted a year earlier.
Breaking down this figure, the publicly-listed broker said the retail business segment generated PLN 428 million or 82 percent of the group’s total volumes, while institutional traders commanded approximately 18 percent after yielding PLN 89 million in revenues. XTB provides its institutional services under the brand X Open Hub, which offers liquidity and technology to other financial institutions, including brokerage houses.
XTB said its operating revenues were primarily influenced by the commodities CFDs segment as the asset class generated 40 percent of the company’s total revenue compared to only 7 percent a year earlier. Meanwhile, revenues from FX CFDs amounted to 8.6 percent of total revenues relative to 6.2 percent in 2019. CFDs based on stock indices commanded a share of 49 percent but were much lower from its dominant chunk of 84 percent the previous year.
Demand has been building
Meanwhile, the brokerage experienced a flood of new investors who saw the market chaos as an investment opportunity. Coupled with this advance, XTB has registered a record number of active accounts with 52,084 as of H1 2020, growing steadily from 23,688 in H1 2019, or more than double than it was a year ago. New accounts were also on the uptick, swelling more than three times year-over-year to 52,434 in H1 2020, relative to just 16,089 accounts in H1 2019.
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“The significant factors determining the level of revenues were above-average volatility on financial and commodity markets caused by among others coronavirus COVID-19 global pandemic and a constantly growing client base combined with their high transaction activity noted in the number of concluded transactions in lots,” the company explains.
The sustained volatility also drove new and existing client engagement, leading to record trading levels. XTB said CFDs turnover surged to 1.6 million lots in the H1 2020 relative to less than 780,000 lots in the same period a year ago.
Also, XTB saw its operating expenses soaring in the six months through June 2020, after seeing a figure of $36.6 million (PLN 138 million) – this was up 66 percent year-over-year from PLN 88 million in H1 2019.
The most significant change across XTB’s financial results came regarding its net profit, which rose sizably to $77 million (PLN 293 million) in H1 2020, a dramatic rise from just PLN 5.1 million it earned in Jan-June period of 2019.
One of the group’s most noteworthy findings was its average earning per active client, which jumped to PLN 9.9 from PLN 3.7 last year. Net deposits also matched the strong overall financials, jumping to $278 million (PLN 1.04 billion) from PLN 195 million in H1 2019.