Dukascopy goes on M&A campaign after achieving record results in H1 2015

As far as innovative FX companies which stand out with their own ideology are concerned, Switzerland’s Dukascopy Bank reserves its place as a firm with a completely different modus operandi to every firm in the business. Indeed, as the name suggests, Dukascopy being a Latinization of ‘the vision of Duka’, referring to founder and President […]

Dukascopy Stella Performance

As far as innovative FX companies which stand out with their own ideology are concerned, Switzerland’s Dukascopy Bank reserves its place as a firm with a completely different modus operandi to every firm in the business.

Indeed, as the name suggests, Dukascopy being a Latinization of ‘the vision of Duka’, referring to founder and President Andre Duka’s ambition to create something truly different, the firm develops its own technology, provides a proprietary end to end trading solution to direct customers and white label partners, as well as operates as a Swiss Bank and a media entity with its own television channel producing various broadcasts relating to several topics from technology to current affairs.

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This complete eschewing of the ‘me too’ approach which many retail FX firms have adopted is an expensive and resource hungry business, however Dukascopy has enjoyed a stellar six months, achieving a revenue of 17.0 million Swiss francs which is 52% above the first semester of 2014, attributing the increase in fortunes to strong business volume and market volatility during the initial part of the year.

Indeed, being a Swiss bank, one would perhaps estimate that the Swiss National Bank’s removal o the 1.20 peg on the EURCHF pair in January would have geenrated substantial volatility and resulted in increased trading activity, however Dukascopy’s customer base is largely outide Switzerland, and largely in emerging markets such as Russia and the Commonwealth of Independent States, Eastern Europe, the Middle East and parts of the Asia Pacific region, therefore the figures are a genuine display of increased activity from a balanced audience in terms of geography and trading instruments.

Whilst out of the 17 million Swiss francs, a full software development and in house support team must be funded, the state of the art television studio requires resources and the compliance and licensing bureaucracy which is part and parcel of being a Swiss bank is far from cheap, the company still managed to reduce its operating expenses by 8% compared to the same period last year, with 11.6 million Swiss francs having been spent in the first six months of this year.

Indeed, profit margins are narrow, however the company’s rationalization and concentration on cost cutting without diminishing the quality of product or ability to onboard new customers under the sterling leadership of Chief Operating Officer Mark Spaelti, a well recognized senior figure with a long standing background in investment banking in Switzerland.

In order to increase its presence in Australia, South Korea, South Africa and Canada, the company is now looking to acquire existing companies in those regions rather than via organic growth or provision of white label solutions to firms operating in such regions.

A shrewd approach, as all four regions are very established with regard to the FX industry’s structure, thus the purchase of existing companies gives an immediate presence without having to attempt to carve out a customer base from scratch and do battle against established brokerages.

Photograph: FinanceFeeds CEO Andrew Saks-McLeod at Dukascopy TV in Geneva, Switzerland

 

 

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