Swissquote registers 13.8% increase in net profit in 2018

Maria Nikolova

Swissquote forecasts 5-10% growth in operating revenues in 2019.

Swiss provider of online financial and trading services Swissquote Group Holding SA (SWX:SQN) has earlier today posted a set of solid financial metrics for 2018, with revenues and profits growing in annual terms.

Pre-tax profit was up 17.4% to CHF 53.8 million, whereas net profit rose by 13.8% year on year to CHF 44.6 million.

Operating revenues were up 16.2% from the year before to CHF 225.4 million. Net revenues rose 14.3% reaching CHF 214.5 million. Swissquote explains that (with one exception) all four business areas contributed to the record result.

Thus, net fee & commission income rose to CHF 99.5 million on the back of increased trading activity. Net eForex income grew 7.7% to CHF 71.8 million. This growth reflected a larger number of new clients, an increase in client assets and a higher volume of transactions. Net interest income also rose (+68.1%) as a result of the steady rise in short-term interest rates in the US and the growing volumes of client assets in foreign currencies. By contrast, net trading income fell 6.5%.

Operating expenses were 13.2% higher than a year earlier due to investment in technology, marketing and employees.

The capital ratio amounted to 29.0% in 2018, up from 26.1% in 2017. Total equity increased by 19.3% to CHF 352.2 million. Of this amount, EUR 27.7 million will be withdrawn as a result of the purchase of Luxembourg-based Internaxx Bank S.A. The transaction was approved by Luxembourg and European supervisory authorities on March 6, 2019. Swissquote anticipates the transaction to complete before the end of the first quarter of 2019.

In terms of outlook, Swissquote forecasts a 5-10% increase in operating revenues in 2019. On the downside, due partly to a slow trading start this year and one-off investments in geographical expansion, the company expects its pre-tax profit will fall by CHF 10 million in 2019.

The integration of Internaxx is planned, which means new platform, additional products and extra marketing expenses. Also, Swissquote Pte Ltd was founded in Singapore, so a CMSL will have to be sought from the Singaporean authorities. The company says that 14 new Asian trading exchanges are to be activated on the Swissquote platform for trading in real time.

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