Swissquote expects 120% jump in pre-tax profit in H1 2020

Maria Nikolova

Swissquote’s pre-tax profit is expected to exceed CHF 56 million in the first half of 2020.

Switzerland’s most prominent online trading bank Swissquote has earlier today provided a trading update for the first half of 2020.

Extreme market volatility has prompted a surge in investors’ interest into Swissquote’s trading platforms. The first months in 2020 were marked by strong volatility on financial markets, increased trading activity for Swissquote and a massive inflow of new clients, the company says.

These factors resulted in an impressive performance for Swissquote in the first half of 2020 with net revenues marking a rise of more than 40% from a year earlier and pre-tax profit up by more than 120% compared to the same period last year. Net revenues for the first half year are now estimated to be over CHF 160 million (H1-2019: CHF 112.2 million) whilst pre-tax profit should exceed CHF 56 million (H1-2019: CHF 25.1 million).

According to the outlook for 2020 reported in March 2020, net revenues and profitability would increase by 10%. A revised outlook taking into account a more prudent second half year 2020 will be provided as part of the publication of the half year results on August 11, 2020.

Let’s recall that in 2019 to CHF 230.6 million. In the face of a positive market environment and more than 30,000 new client accounts, net fee & commission income declined by 6.6% in annual terms to CHF 92.9 million, as trading volumes decreased overall from 3.0 million to 2.8 million transactions. On the brighter side, net eForex income rose by 19% to CHF 85.5 million (CHF 71.8 million).

Net interest income increased by 20.7% to CHF 40.1 million from CHF 33.2 million a year earlier. Key drivers of this development included central bank monetary policies and the adjustment of the company’s own negative interest policy.

Net trading income (currency trading excluding eForex) recorded a slight rise of 2.3% to reach CHF 21.4 million in 2019.

Contrary to expectations, the net profit figure of CHF 44.7 million slightly surpassed the prior-year figure (CHF 44.6 million). A positive factor here was the implementation of a new corporate tax regime in Canton of Vaud.

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