XTX Markets Sees its Profits Surge During FY 2016

Trading revenues and investment management fees helped drive XTX's financials in 2016.

XTX Markets Limited has reported its FY 2016 financial results for the year ending December 31, 2016. The latest figures highlight growing revenues and profits for the non-bank foreign exchange liquidity provider despite a strong uptick in costs for the group.

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In terms of revenues at XTX Markets, the group reported a figure of £131.9 million ($170.9 million) for the 2016 fiscal year, an increase of 82.2 percent year-over-year from just £72.4 million ($93.8 million).

XTX Markets’ revenues were given a strong boost in 2016 from Green Park Trading 1 (GPT1), a sovereign trading entity funded from a loan by the group itself. Moreover, while trading advisory fees were virtually constant on a yearly basis in 2016, XTX’s net trading revenue and investment management fees constituted the vast majority of revenues growth.

H2 2016 also saw XTX Markets migrate the trading book from GPT1 and trade on principal on its own account. Additionally, administrative expenses at XTX rose to £56.8 million ($73.6 million) in FY 2016 – this corresponded to a growth of 126.1 percent year-over-year from £25.1 million ($32.5 million) in 2015.

The main reason for this uptick in costs was an increase in personnel, which saw its support staff swell from 25 in 2015 to 40 in 2016. XTX’s directorship felt that the corresponding increase in cost was appropriate and proportional to the growth in business activity.

The rise in expenses did little to deter XTX’s operating profits before tax, which were also pointed noticeably in for FY 2016. The group disclosed a figure of £75.1 million ($97.3 million) in 2016, vs. £47.3 million ($61.3 million) in 2015, or 58.8 percent higher year-over-year. After tax, profits were calibrated to £60.5 million ($78.4 million) for FY 2016, up a healthy 59.2 percent on the year.

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