SAXO Bank Reports Slow H1-2018 Earnings, Net Profit Fell by a Whopping 53%

Kim Fournais, CEO of Saxo Bank
Kim Fournais, CEO of Saxo Bank

The Copenhagen-based multi-asset broker, SAXO Bank on Thursday has published its interim financial results for the first half of 2018. The company in its first-half results has defied the industry trend of strong earnings and has reported a slowdown in overall business operations. The slowdown in result may be caused due to the company’s massive restructuring operation in which it is focusing its major part of the resources in developing Chinese operation.

SAXO Bank has reported revenue of DKK 1.51 billion (USD $230 million) in the first half of 2018, a slight decrease of 0.3 per cent compared to the first half of 2017. Net Profit experienced a significant fall of 53 per cent, coming in at DKK 150 million compared to DKK 230 million last year first half. The company has attributed the fall to the implementation of the new pricing structure.

The operating income during the first half of the year fell by 3 per cent to DKK 1.5 billion compared to DKK 1.56 billion last year first half. Adjusted EBITDA during the period also fell by a significant 28 per cent year on year. On the other hand, Client Collateral did witness a jump of 7 per cent to DKK 110.4 billion compared to the end of December 2017. 

Commenting on the results, Kim Fournais, CEO and co-founder of Saxo Bank, said:

“The results reflect the low levels of volatility across financial markets that have marked the first half of the year. Another contributing factor is the introduction of a new and more transparent pricing structure that lowers prices significantly across asset classes in several key markets. Despite an immediate impact on income, it has resulted in an increase in new trading clients and reaffirms our long-term growth strategy of competing on product, platform, price and service.”

“We continue to develop and invest in our product offering and technology to improve the Saxo experience for traders, investors, and partners. The launch of SaxoTraderPRO brings a variety of customizable trading tools to active traders and institutional clients. Catering to the investor segment, we have added mutual funds as a new asset class on our platform which now facilitates access to more than 35,000 tradable instrument.”

“For the rest of the year, we remain dedicated to continuously improving our products, platforms and service and helping clients and partners succeed.”

The results published are completely different from the industry trends in which brokerages have been reporting record first-half results on the back of increased trading activities due to increased volatility. In October 2017, China’s Geely Group acquired the 51.1 per cent stake in SAXO Bank while Sampo Group, a leading Nordic financial services group, offering to buy 19.9 per cent of the company. The deal is pending approval from several regulatory authorities.