XTB Net Profit Soars in Q1 2020 on Back of COVID-19 Volatility
- The broker also achieved record revenues during the three month period.
Polish brokerage XTB has published its financial and operational results for the first quarter of 2020 on Sunday, revealing a significant yearly uptick in net profit, new clients and contracts for difference (CFD) trading volume.
As Finance Magnates has reported extensively, returning Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the trading markets driven by the coronavirus pandemic has provided a boost for many brokers, with clients becoming more active as they try to profit from the large swings in currencies and prices.
This trend has also benefitted the Polish broker, as during the first quarter of 2020 it posted net profit of around €38.94 million, which is significantly higher on a yearly comparison by 22,962.78 per cent.
Although the net profit is very strong for the broker in Q1, it is important to highlight that the large uptick is largely due to the fact that the first quarter of 2019 reported a very weak net profit for the broker, having fallen by 98.7 per cent year-on-year, weighed down by the product intervention measures implemented by the European Securities and Markets Authority (ESMA).
Nonetheless, the first-quarter net profit has still increased from the final quarter of last year, which had a net profit of €8.2 million. Therefore, net profit in Q1 has risen by 375.10 per cent from the previous quarter.
In addition, XTB noted a record revenue increase of 650 per cent year-on-year, increasing by approximately €58.75 million from €9.04 million in Q1 2019 to reach €67.79 million.
“The significant factors determining the level of revenues were above-average volatility on financial and commodity markets caused by among others Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term 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 report said.
Speaking to Finance Magnates Omar Arnaout, the CEO of XTB said: "The results in the first quarter of 2020 are not only the effect of very high market volatility, but also the effect of everything we have been building in previous years.
"After the product intervention we did not change our strategy, we did not decrease costs and we put complete focus on significantly increasing the number of active clients as well as the diversification of our products and our global presence. I am very happy that our strategy has brought such effects and I am also sure that without our immense technological development this would have not been possible."
XTB CFD trading volume almost doubles YoY
The CFD trading volume during the first quarter has almost doubled on a yearly measurement, coming in at $248.65 billion. Specifically, this is up by 90.8 per cent from the CFD trading volume of $130.34 billion posted in the first quarter of last year.
The number of active clients has also soared in the first three months of 2020. In particular, the average number of active clients in Q1 2020 was 45,660 which is more than double the 22,245 average in the first quarter of last year.
Average operating income per active client was around €1,482.74 during the first quarter, which is better than the €398.35 achieved in Q1 of 2019.
Polish brokerage XTB has published its financial and operational results for the first quarter of 2020 on Sunday, revealing a significant yearly uptick in net profit, new clients and contracts for difference (CFD) trading volume.
As Finance Magnates has reported extensively, returning Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the trading markets driven by the coronavirus pandemic has provided a boost for many brokers, with clients becoming more active as they try to profit from the large swings in currencies and prices.
This trend has also benefitted the Polish broker, as during the first quarter of 2020 it posted net profit of around €38.94 million, which is significantly higher on a yearly comparison by 22,962.78 per cent.
Although the net profit is very strong for the broker in Q1, it is important to highlight that the large uptick is largely due to the fact that the first quarter of 2019 reported a very weak net profit for the broker, having fallen by 98.7 per cent year-on-year, weighed down by the product intervention measures implemented by the European Securities and Markets Authority (ESMA).
Nonetheless, the first-quarter net profit has still increased from the final quarter of last year, which had a net profit of €8.2 million. Therefore, net profit in Q1 has risen by 375.10 per cent from the previous quarter.
In addition, XTB noted a record revenue increase of 650 per cent year-on-year, increasing by approximately €58.75 million from €9.04 million in Q1 2019 to reach €67.79 million.
“The significant factors determining the level of revenues were above-average volatility on financial and commodity markets caused by among others Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term 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 report said.
Speaking to Finance Magnates Omar Arnaout, the CEO of XTB said: "The results in the first quarter of 2020 are not only the effect of very high market volatility, but also the effect of everything we have been building in previous years.
"After the product intervention we did not change our strategy, we did not decrease costs and we put complete focus on significantly increasing the number of active clients as well as the diversification of our products and our global presence. I am very happy that our strategy has brought such effects and I am also sure that without our immense technological development this would have not been possible."
XTB CFD trading volume almost doubles YoY
The CFD trading volume during the first quarter has almost doubled on a yearly measurement, coming in at $248.65 billion. Specifically, this is up by 90.8 per cent from the CFD trading volume of $130.34 billion posted in the first quarter of last year.
The number of active clients has also soared in the first three months of 2020. In particular, the average number of active clients in Q1 2020 was 45,660 which is more than double the 22,245 average in the first quarter of last year.
Average operating income per active client was around €1,482.74 during the first quarter, which is better than the €398.35 achieved in Q1 of 2019.