IG Group (LON: IGG), Europe’s largest CFD brokerage firm has reported its first-quarter earnings results for FY 19, registering a drop in revenue what could be an early sign of the effects of the regulatory crackdown. IG Group has May 31st fiscal year end and the latest quarterly result shows if of June to August 2018 period. 

During the quarter, the revenue for the company came in at £128.9m, which is 5 per cent lower compared to the same period last year which was at £135.2m and is 13 per cent lower compared to previous month. The fall in revenue was driven by the decline in derivatives trading of 12 per cent and 8 per cent in EMEA and UK region respectively. Also, there is a ban on binary options for two months that kicked in at the beginning of July. Breaking up the revenue, IG Group reported an increase in revenue from its APAC region where it booked 7 per cent gain to £35.5 million.

IG Group had predicted that it would suffer a 10 per cent decline in revenue generation from the changes in the structure of leverage trading that was introduced by ESMA. It seems the predictions are as per the line although the sample size is quite less. IG Group also said that the heightened level of volatility which led to robust client activity in the first half of this year failed to continue into the FY 19. 

The group said that the more than half of the revenue in the first quarter has been generated by professional traders who don’t fall under the purview of latest regulatory guidelines. During the quarter it also received the license from the German regulator the German unit to offer financial services to EU clients in the run-up to Brexit. Increase in total group clients somewhat remains flat with a 3 per cent increase to 129,000, helped primarily by growth in share dealing and investment clients. The number of clients in UK and EMEA region declined, in which UK reported 13 per cent drop and EMEA reported 10 per cent drop.

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.