INTL FCStone FX Prime Brokerage Revenues Jump by 60% in Q1

The boost was driven by a settlement in regards to the Barclays PLC ‘last look’ class action.

INTL FCStone, a global brokerage and financial services firm, has revealed its financial results for the first quarter of its 2019 fiscal year, which ended on December 31, 2018. During the quarter, while the firm overall saw a dip in revenues, the company’s prime brokerage sector recorded a solid performance.

For the three months ended December 31, 2018, INTL FCStone recorded total revenues of $6.55 billion.  Even though all revenue segments reported an increase during the first quarter, except for sales of physical commodities, the total revenues achieved in Q1 of the 2019 fiscal year was down 17 percent when measured against the prior year corresponding period.

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Net operating revenues, however, managed to climb by 14 percent year-on-year, rising from $130.3 million in the first quarter of the 2018 fiscal year to $149 million in the first quarter of 2019.

Sean O'Connor, INTL FCStone CEO
Sean O’Connor
Source: INTL FCStone

Commenting on the results, Sean O’Connor, the Chief Executive Officer of INTL FCStone Inc., said: “Our record financial performance in fiscal 2018 continued into our Q1 2019, with impressive 25% growth in operating revenues and a 31% increase in pre-tax earnings versus a year ago.”

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“We saw strong growth in transactional volumes in all of our major businesses which resulted in a record quarter for our Global Payments segment as well as our Equity Capital Markets businesses, which benefited from increased volatility and growing market share.”

INTL FCStone Prime Brokerage Revenues Soar in Q1 2019

Taking a look at INTL FCStone’s foreign exchange (forex) prime brokerage unit, which offers FX services to the institutional trading market, operating revenues came in at $7.5 million in the first quarter of the 2019 fiscal year, a solid increase of 60 percent year-on-year.

This increase was in large part thanks to a $2.7 million settlement which was received during the period, in regards to the Barclays PLC ‘last look’ class action. Without this cash injection, FX prime brokerage operating revenues were flat year-on-year. However, this is still a rather good result considering that forex volumes dipped by 21 percent in the period as market volatility drove a widening of spreads.

INTL FCStone’s FX prime brokerage operates under the clearing and execution services arm of the company. For this sector as a whole, which also includes the firm’s voice brokerage business in the EMEA, operating revenues were $95.2 million in the first quarter. This represents a jump of 32 percent when compared to the prior year period, which recorded operating revenues of $72.2 million.

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