XTB’s Net Profit Plunges 12.2% in H1 despite Record New Clients

Wednesday, 26/07/2023 | 18:23 GMT by Solomon Oladipupo

XTB blamed the lower revenue and profit on lower volatility during Q2.

The broker onboarded 167,000 or 65.5% more new clients during H1.

The net profit of the Polish forex and contracts for difference (CFDs) broker, XTB, slumped 12.2% to zł421 million during the first half (H1) of 2023 when compared to the same period a year earlier. Similarly, the revenue of the broker fell 2% to zł818.9 million.

Lower Volatility Impacts XTB’s Revenue in H1

XTB disclosed the figures in its preliminary results for the first six months of 2023 released today (Wednesday). The broker saw a decline in its net profit and revenue despite onboarding a record 167,000 new clients during the period. The number represents a jump of 65.5% year-over-year (YoY) in new customers.

In addition, while XTB’s active clients surged 44.4% YoY to 274,450, its CFD profitability per lot, or profit on a per-trade basis, descended 17.4% YoY to zł226. This is despite the fact that the company, which is listed on the Warsaw Stock Exchange, reported an increase of 18.5% YoY in its CFD volume. The volume expanded to 3.6 million at the end of June.

XTB’s Net Profit Plunges 12.2% in H1 despite Record New Clients — Source: XTB

Similarly, XTB’s operating income in H1 2023 decreased 2.1% YoY to zł818.9 million, with earnings before interest and taxes (EBIT) also dropping 16% YoY to zł477.3 million. In the preliminary results, XTB blamed the lower revenue on lower profitability from each trade.

“Contributing to this decline was a lower profitability per lot of zł48, amounting to zł226 (H1 2022: zł274),” XTB explained. “This decrease is mainly the result of lower volatility in the financial and commodity markets in Q2 2023, compensated in part by the constantly increasing number of new clients (increase by 65.5% YoY), combined with their high transactional activity expressed in the number of CFD contracts concluded in lots.”

Earlier, XTB reported a record-breaking consolidated net profit of EUR 64.4 million (about zł285 million) for Q1 2023, which was an impressive increase of 19.9% YoY, Finance Magnates reported. The company attributed the profit to high volatility in financial and commodity markets driven by geopolitical tensions and banking crises. Additionally, XTB's strategic marketing initiatives have significantly contributed to a substantial increase in client numbers and transactional activities.

XTB Goes Beyond CFDs

Meanwhile, during the first half of 2023, XTB made several efforts to improve its business, including introducing stock trading to clients in the UK. The move came months after the broker disclosed plans to go beyond offering only CFDs.

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