Swissquote, a Switzerland-based banking group specialized in the provision of online financial and trading services, has posted record-breaking results for 2017.
Swissquote remains one of Switzerland’s best-financed banks. Total Equity amounted to CHF 295.1 million (vs CHF 280.8 million in 2016).
The year-on-year comparison shows total net revenues increased by 25.0 percent to CHF 187.8 million while net profit grew by 88.8 percent to CHF 39.2 million and client assets were up 29.9 percent at CHF 24.1 billion. Swissquote expects approximately 10% growth both in net revenues and earnings in 2018.
The Board of Directors will propose a distribution of CHF 0.90 per share of which CHF 0.86 as a dividend and CHF 0.04 as a reimbursement of Reserves from capital contributions.
Regarding the astounding growth of 25% in net revenues, the absolute value of CHF 187.8 million (CHF 150.2 million) was impacted by negative interest rates (-CHF 7.5 million), but transactions rose by 310,000 to 2.6 million, net fee & commission income grew by 22.5 percent to CHF 85.2 million (CHF 69.5 million), and the number of transactions per customer per year remained stable at 11.0.
The growing importance of robo-advisory services (ePrivate Banking), successful trading in derivative products via Swiss DOTS, and trading in cryptocurrencies have all contributed to the company’s impressive results.
eForex income increased by 26.2 percent to CHF 66.7 million (CHF 52.8 million) due to an increase in new clients (+29.0 percent) and client assets belonging to eForex clients (+45.5 percent).
Net trading income (currency trading excluding eForex) grew by 32.7 percent to CHF 22.3 million (CHF 16.8 million) and net interest income increased by 27.8 percent to CHF 19.7 million (CHF 15.4 million).
Earnings nearly doubled as operating expenses increased by CHF 14.9 million, but net revenues rose by CHF 37.5 million. Operating expenses were 11.8 percent higher in 2017, at CHF 142.0 million (CHF 127.0 million) due to continuing heavy investment in technology, marketing, and staff, whose numbers grew by 43 to 593.
All earnings figures rose sharply: pre-tax profit jumped by 97.3 percent to CHF 45.8 million (CHF 23.2 million), the pre-tax profit margin increased to 24.4 percent (15.4 percent), net profit surged by 88.8 percent to CHF 39.2 million (CHF 20.8 million) and the net profit margin climbed to 20.9 percent (13.8 percent). The capital ratio (CET 1) stood at 26.1 percent (24.5 percent).
Client assets increased by a substantial 29.9 percent to CHF 24.1 billion (CHF 18.6 billion), with the net new money inflow amounting to CHF 2.7 billion. As at the end of 2017, assets of CHF 23.0 billion (+31.6 percent) were held in trading accounts, CHF 600.6 million (-20.8 percent) in saving accounts, CHF 203.1 million (+75.2 percent) in Robo-Advisory accounts and CHF 328.9 million (+45.5 percent) in eForex accounts.
The total number of accounts grew by 6,511 (+2.2 percent) to 309,286 (302,775). The
breakdown is as follows: 236,861 trading accounts (+0.3 percent), 28,955 saving accounts (-11.9 percent), 1,898 Robo-Advisory accounts (+22.3 percent) and 41,572 eForex accounts (+29.0 percent).
Cryptocurrency trading proved to be a smart bet. Swissquote became the first European online bank to offer its clients the opportunity to invest in cryptocurrencies and trade in them against the EUR or USD. Initially confined to Bitcoin, the service them added Bitcoin Cash, Ether, Litecoin and Ripple, making it the larger offering of virtual currencies by any bank.
Clients’ ordinary Swissquote trading accounts are given access to cryptocurrency trading in the same way as with any other currencies, shares or funds. In the fourth quarter of 2017 (revenues of CHF 5.6 million in 2017), a flood of new accounts was opened, but the impact of the new accounts on revenues will only be clearly noticeable in the figures for the first half of 2018.
