Polish broker XTB triples profit in Q1 2022

In the three months to March 30, XRB revenue was reported at PLN 440 million ($98 million), up 135 percent from PLN 186 million in the same period a year ago. On a quarter-over-quarter scale, the figure also more than doubled from the Q4 2021.

Also, XTB saw its operating expenses rise in the first quarter after seeing a figure of PLN 131 million ($29 million) – this was up 50 percent year-over-year from PLN 87 million in the comparable period of 2021.

In terms of its operating income, the listed broker disclosed a net profit of PLN 252.6 million ($56.6 million), which was three times higher than the PLN 68.5 million it earned in the Q4 2021. Taking a year-over-year perspective, XTB’s core profit also saw a whopping 183 percent rise in the three month through March 2022.

The Polish brokerage firm, like rivals, saw trading volumes skyrocket in 2022 as retail traders tried to take advantage of swings in the financial markets brought on by the Russia-Ukraine war.

XTB said its operating revenues were primarily influenced by a growing client base combined with their solid trading activity. Specifically, CFDs trading volumes spiked to 1.56 million lots compared to 1.1 million in the first quarter 2021.

XTB to kick off its operations in South Africa

XTB explained that indices CFDs segment generated 57 percent of the company’s total revenue. This figure ticked higher as compared to 40 percent a year earlier. As explained, this was a consequence of high profitability on CFD instruments based on the US 100 and US 500 indexes, the German DAX stock index (DE30) and the Russian RUS 50 index.

The second most profitable class of assets was stock commodity CFDs, which saw their share in total revenues amounting to 30 percent. Meanwhile, FX CFDs generated less than 10 percent of XTB’s total revenues.

“XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the first quarter of 2022, the Group acquired 55 333 new clients compared to 42 760 a quarter earlier, which means an increase of 29,4%. This is the effect of continuing the optimized sales and marketing strategy, bigger penetration of already existing markets, successive introduction of new products to the offer and expansion into new geographic markets. The number of active clients was record high in the analysed period. It increased from 127 174 to 149 726, i.e. by 17,7% q/q,” the company further explains.

The Warsaw-based brokerage said it plans to kick off its operations in South Africa in the second half of the year. Earlier in August, XTB acquired an FSCA license in South Africa and is now authorized as a Financial Service Provider locally. Registration with the regulatory body allows ‘XTB Africa (Pty) Ltd’ to operate as a financial service provider in the country, which the company cited as an important region for strategic expansion.

XTB’s subsidiary in South Africa has been in the licensing process for more than two years. The license allows XTB to provide its range of FX and CFDs products to retail and professional clients not only from the South Africa but also to expand the offering to other African countries. The addition of this coveted license extends the group’s regulatory arsenal to include regulated companies authorised by CySEC in Cyprus, KNF in Poland, the DFSA in Dubai and FCA in the United Kingdom.

Nevertheless, Paweł Szejko, XTB’s CFO and member of the management board, said in a press conference that the group’s priority is to develop its presence in the Middle East.