Poland-based global leader in Forex and CFD trading, XTB has reported its first quarter results for the FY 2019. The broker reported a subdued performance during the quarter, still feeling the pinch of change of regulations by ESMA, which has affected almost all the brokers operating in the European region.
The broker on Thursday released preliminary financial results for the first quarter of 2019, reporting a 4.4 per cent or PLN 1.9 million ($492,851) or decline in net revenue quarter-on-quarter, falling down from PLN 42.8 million in the previous quarter to PLN 40.9 million.
The product intervention measures from ESMA had a large effect on the results for the first quarter, which resulted in lower volatility and customer engagement.
The revenue share from contracts-for-difference (CFD) instrument based on currency pair came in at 1.1 per cent during the quarter, marking a huge drop from the same time period last year, which contributed 29.2 per cent to the revenue share.
Out of all traded currency pairs, the EUR/USD currency pair is the most popular among XTB clients and revenue generated from the currency CFDs is PLN 433,000. The biggest CFD class instrument to contribute to revenue was CFDs based on stock indices, recording a total share of 89.3 per cent to total revenue, up from 57.5 per cent a year earlier.
During the quarter, revenue was primarily driven by demand for CFD instruments based on the German DAX stock index (DE30), US indices US500, US100 and US300 indices.
Looking at the full year, the report said:
“The Management Board expects in 2019 operating expenses to be at a level comparable to that observed in 2018. The final level will depend on the variable remuneration elements paid to employees, the level of marketing expenditures and the impact of ESMA’s product intervention on the level of revenues generated by the Group.”