Swissquote Group Holding SA, one of the leading Switzerland banks well known for its online trading and financial services has recently published its 2019 earnings report, rise in 2019 net profit. . As per annual report statement published by the firm for 2019 it has recorded solid revenue and profit for the year with 7.5% year of year increase in net revenue to CHF 230.6 Million and a CHF 44.7 Million net profit also considerably higher than 2018 despite significantly higher personnel expenses and depreciation faced in the year. The statement also mentioned that the firm is anticipating further growth in net revenues and profit of more than 10% in 2020. The firm also saw its client assets rise to a record CHF 32.2 Billion thanks to net new money inflow worth nearly CHF 4.6 Billion in 2019. The operational revenues have reached highest ever level recorded till date at CHF 239.9 million which when adjusted for negative interest rates and fair value adjustments stands at above mentioned net revenue.
However, the net fee & commission income has declined by 6.6% to CHF 92.9 Million as trading volumes decreased overall from 3.0 Million to 2.8 Million transactions. Overall market environment had remained positive despite pressure from various geo-political issues which impacted economic activity and the firm had managed to gain more than 30,000 new client accounts in the year. Net eForex Income rose by 19% to CHF 85.5 Million thanks to substantial investment made towards improvement of trading system efficiency. Net trading coming – (Currency trading excluding eForex) recorded a slight rise of 2.3% to CHF 21.4 Million. The major factors which acted as driving force behind the positive revenue report are central bank monetary policies and adjustment of the company’s own negative interest policy. It should be noted that the bank imposes negative interest rates on cash amounts of more than CHF/EURO 500,000 but a proportion of this charge is reimbursed to clients in form of trading credits.
The spike in operational expenses compared to previous year albeit within expectations was primarily due to higher personnel expenses resulting from integration of Internaxx Bank S.A. bringing the total head count to 722. However it should be noted that aside from 36 employees who came from internaxx, the firm also hired 24 employees directly. The operational expenses stand at CHF 180.1 Million up by 12% YoY. While the pre-tax profit declined by 5.9% owing to increased operational expectations at CHF 50.6 Million, the net profit exceeded expectations with a profit margin of 19.4% at CHF 44.7 Million. Despite the boost in operational expenses owing to purchase of internaxx and personnel expenditure , the spike in net profit helped maintain a solid base III capital ratio at 21.7% reinforcing its status as one of the best financed banks in Switzerland. The firm’s new net money inflow of 4.6 Billion can be divided into two sources, one stemming from organic growth while the other half was due to its M&A with internaxx. This along with general stock market developments in 2019 helped the firm see a 35.3% increase in total client assets enabling it raise by more than third compared to previous year.
Achievements During 2019
The firm has achieved two key milestones in 2019 with acquisition of Capital Market Service License to subsidiary Swissquote Pte Ltd – the pan Asian booking centre for bank which offers comprehensive services to institutional investors and acquisition of Luxembourg based bank Internaxx which has since been rebranded as Swissquote Bank Europe S.A. The firm also added new asset categories for its Robo-Advisory services to now support Cryptocurrencies and real estate. The real estate category is made up of ETFs and investment funds that focus real estates either directly or via listed companies. Its Swiss DOTS platform saw removal of offerings from Deutsche Bank at end of 2019 while new issuer BNP Paribas added nearly 10000 leverages products to OTC trading platform. The platform is now made up offerings from of Swissquote, BNP Paribas, UBS, Goldman Sachs, Commerzbank and Bank Vontobel. It has also expanded its cryptocurrency offerings for trading service to now include – EOS, Stellar, Chainlink, Tezos, Ethereum Classic, Augur and 0x brining total number of crypto coins available for trading to 12. Aside from trading facility, the bank has made it possible to transfer digital coins between third party wallets and Swissquote accounts as of March 2019 gaining capability of fully integrated trading and custodian service provider for both private and institutional investors.
