IG Group Announces 9% Decline in Global Revenues, Obtains Swiss Regulation

IG Group, a global trading services provider, has issued financial performance data for Q3 2014. Revenue in Q3 2014 fell 9% year-on-year from £93.6 million to £85.6 million. In an official statement, IG said, “The first three months of the company's financial year (June-Sep 2014) were particularly quiet in the financial markets, with volumes and Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term close to historic lows and the continuation of recent weakness in Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term activity.”

Looking in more detail at the geographical breakdown of the published performance metrics, it appears that IG’s UK operations were the most resilient of all their global locations, having suffered a 3% year-on-year decline in revenue compared to Australia (-10%), Europe (-9%) and the Rest of the World (-25%). Revenue fell in all regions due to an “extremely quiet backdrop impacting performance,” according to IG’s Interim Management Statement.

The broker reported 9% growth in active clients in Europe and 1% in the Rest of the World, while the UK and Australia saw respective 8% and 9% declines. The group in total suffered a 3% year-on-year decline in active clients globally and a 6% decline in revenue generated per client.

Flat trading conditions in the FX market hit IG’s Japan and Singapore operations most, where revenue fell by 30%. The best performer in terms of revenue growth was South Africa.

Regulated in Switzerland, next is Dubai

Only a few days ago, IG announced the launch of its new stockbroking service offered to clients in the UK and Ireland, claiming the move as a “major strategic development” for the company. IG plans to improve functionality for its new stockbroking service by “adding the ability for clients to use their equity assets as collateral against shorter-term leveraged trading,” and wants to commence a targeted international roll-out as soon as possible.

Earlier this month, Swiss regulator FINMA granted authorization for IG to open a new sales office in Geneva, with the company expecting “to begin trading there in the very near future,” according to a statement.

IG has also announced that it plans to “progress its license application in Dubai,” which suggests an imminent expansion into the Middle East region.