Saxo Bank reveals big profit hit as client activity shrinks
Copenhagen-based broker, Saxo Bank reported lower revenues and net income for the first half of 2022 as customer trading activity dropped as compared with the previous year.
The FX bank has announced its financial results for the six months ending June 30, 2022. The multi-asset group marked a fall in H1 revenues, which came in at DKK 2.14 billion ($288 million), down 12 percent from DKK 2.43 billion for the same period last year.
As for the bottom-line metrics, Saxo Bank disclosed a net profit of DKK 302 million ($40.6 million), down 41 percent from DKK 512 million in the January-June period of 2022.
Meanwhile, Saxo Bank won more clients with total active accounts crossing 874,000 for the first time in the company’s 30-year history. Despite onboarding more than 84,000 new accounts in the first semester, total clients’ assets under custody decreased to DKK 591 billion compared to DKK 595 billion last year.
That drop was mainly driven by the decline in the equity market but partly offset by positive net funding from clients. However, the figure remains a record-breaking milestone for the Danish broker, which took 25 years to reach the DKK 100 billion mark and then only 4 years to add an additional DKK 490 billion in client assets.
BinckBank migration still on hold
Commenting on the results, Kim Fournais, CEO and founder of Saxo Bank, said: “The results are not satisfactory and affected by difficult market conditions during the first half of 2022. Despite volatility in financial markets, trading activity was lower than the same period last year. That said, we see it as a testament to the strength of our platforms that we have continued the growth in number of new trading clients, where we have reached a fresh record of 874.000 clients as of 30 June.“
Saxo Bank added that the cost level remained almost unchanged, not least driven by the delayed completion of the BinckBank migration, which has added cost and complexity in running two parallel infrastructures.
Saxo had completed integration with BinckBank, which it acquired in 2019, but the last segment of the Dutch lender’s clients is yet to be migrated later this year. The transaction added more than 400,000 direct clients across four jurisdictions in the Netherlands, Belgium, France, and Italy.
The two companies have worked on the integration of their technology infrastructure over the last two years. They also plan to launch additional products and services to better compete in light of fierce competition in the online trading and investment sector.
Saxo said that their similar geographic footprint, products and customer bases meant the merger made sense and would also drive efficiencies.