Swissquote marks rise in net profit in 2019

Maria Nikolova

The net profit of CHF 44.7 million in 2019 slightly surpassed the prior-year figure of CHF 44.6 million.

Switzerland’s most prominent online trading bank Swissquote Group Holding SA (SWX:SQN) today published its annual report for 2019, with the data pointing to solid revenues and profits.

As indicated by earlier reports in 2019 Swissquote increased its net revenues by 7.5% year-on-year 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.

The rise in expenses brought about a 5.9% year-on-year drop in pre-tax profit to CHF 50.6 million (CHF 53.8 million) and resulted in a pre-tax profit margin of 21.9% (25.1%). 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.

The net profit margin amounted to 19.4% (The figure was 20.8% in 2018).

Half of the high net new money inflow of CHF 4.558 billion (CHF 3.115 billion) relates to organic growth, while the other half derives from the integration of the accounts of Internaxx. A combination of high net new money inflow and general stock market developments in 2019 led to client assets rising by 35.3% to CHF 32.2 billion in 2019. This compares with CHF 23.8 billion in 2018.

As at the end of December 2019, clients held assets of CHF 31.3 billion (+36.3%) in trading accounts, CHF 265.5 million (-13.3%) in saving accounts, CHF 231.9 million (+21%) in Robo-Advisory accounts and CHF 447 million (+22.4%) in eForex accounts.

In terms of more recent developments, Swissquote notes that the first quarter 2020 was marked by a strong increase in trading volumes generated by extreme volatility on financial markets.

Looking at future performance in 2020, Swissquote is anticipating further growth in net revenues and profit of more than 10%. A more precise outlook is however difficult given current market uncertainties, the bank says.

Swissquote is also experiencing a massive demand in account opening. Several thousand applications have been received each week since the beginning of the year. Those requests must be checked in accordance with legal and regulatory standards, which takes time. This explains the current delays in account openings. Swissquote is working hard to clear the backlog.

Given the solid result for the year, the Board of Directors is proposing to the Annual General Meeting of Swissquote Group Holding Ltd, to be held on May 5, 2020, that a dividend of CHF 1.00 per share be distributed to shareholders, as in the previous year.

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