IG Group Suffers Revenue Declines by 6% Y-o-Y in the H1-FY 19

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.

IG Group

IG Group Suffers Revenue Declines by 6% Y-o-Y in the H1-FY 19 on Account of Strict ESMA Regulations

December 5, 2018

IG Group, the UK trading major has reported the financial results of the first half of fiscal 2019. IG Group Holdings (LON: IGG) has reported a 6 per cent year-on-year revenue decline due to strict ESMA regulations. The drop in revenue and profitability comes after the record-setting fiscal 2018. 

In the wake of new European regulatory measures limiting leverage for retail class traders, the brokerage has reported 10 per cent year-on-year decline in global revenue for the four months between August and November.

Regional wise, the revenue in the four month period in the UK and EU region is projected to be 20 per cent lower while APAC and non-ESMA region countries expecting a 9 per cent higher revenue, thus offsetting the impact of ESMA regulations. The figures mentioned are adjusted for the 1200 clients who previously contracted with the UK entity and have chosen to move outside of the ESMA regulation. 

In a statement, IG Group said: 

“The number of clients in the UK and EU who have elected to be classified as professional continued to increase during the period. Around 70% of UK and EU revenue in the four months since all the measures were introduced has been generated by professional clients.” 

During the first half, new clients from APAC and non-ESMA regions have remained constant with very little variation compared to the last year which is 6,400 vs 6,361 last year. In the ESMA regulated region, only 8,200 new clients signed up which 20 per cent lower from 11,666 clients added last year in the same period.

For the Brexit event, the company has secured BaFin license in Germany which will help to continue offering its services in the EU. IG Group is now also planning its expansion to offer trading services in the USA, where its subsidiary has also been approved as the member of National Futures Association (NFA) and is now registered to operate as a Retail Foreign Exchange Dealer (RFED).

The next performance announcement from IG Group will be the financial results for the six months ended 30 November 2018 on 22 January 2019.

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