CMC Markets’ focus on institutional business and high value clients supports income

Maria Nikolova

The proportion of high value clients has continued to grow, helping drive revenue per client up by 33% from the same period last year.

Global provider of online retail trading services CMC Markets Plc (LON:CMCX) saw an increase in revenue per client in the quarter to December 31, 2017, on the back of continued focus on institutional business and high value, experienced clients. The company has earlier today posted an update on its performance in the third quarter of its fiscal year, with net operating income in the period from October 1, 2017 to December 31, 2017, being the highest for the year to date.

Active clients for the quarter were 6% lower than in the corresponding period a year earlier at 38,859, and 4% lower for the year to date. However, the proportion of high value clients has continued to grow, helping drive revenue per client up by 33% from the same period last year and 26% on a year to date basis.

The company noted that the operating costs before variable remuneration continue to be well controlled, and the implementation of its stockbroking partnership with ANZ Bank in Australia remains on track for delivery in September 2018.

Regarding future perspectives, CMC Markets remains confident that its strategy and focus on high value clients will continue to drive growth over time. CMC’s longer-term outlook remains positive and the Group believes that its strategy of targeting high value, experienced clients, many of whom could be ‘elected professional’, together with its proprietary technology puts the Group in a strong position to manage regulatory change.

Concerning the latest regulatory developments, CMC Markets said that uncertainty in this aspect continues and stressed that the Group remains cautious around the impact any potential changes could have on Group performance in the short-term.

The update is in line with comments made by Richard Elston, Head of Institutional at CMC Markets, at the FinanceFeeds London Cup held in July last year. Back then, Mr Elston stressed the importance of CMC Markets’ deal with ANZ Bank in Australia, calling it historic for the company. Under the terms of the deal, after a transition period, CMC is set to service more than 500,000 ANZ retail stockbroking clients under the ANZ Share Investing (ANZSI) brand. During the transition period, CMC will collaborate with ANZ to provide full integration of the platform with ANZ’s product offering, including margin lending, Internet banking and integrated Grow app.

Regarding regulatory challenges, Mr Elston said:

“We have the ability to be flexible when these challenges come along, especially in a white-label environment where we have to be able to adapt the technology in line with regulatory demands”.

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