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 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.

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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.

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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 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.

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