ITI Capital, an FCA-regulated multi-asset brokerage firm, published its financials for fiscal 2021, ending on 31 December. It reported about £3.32 million in turnover, a year-over-year decline of 43 percent. This figure came only from the company's primary operations and excluded other income, which is an additional £2.1 million compared to the previous year's £503,117.

ITI Capital Records 41% Operating Loss

The operating loss of the broker increased by 41 percent to £3.4 million despite the administrative expenses remaining the same at around £8.8 million. After considering other income and expenses, ITI ended the year with a loss of almost £3.5 million, which is 65 percent higher than in 2020.

Among other metrics, the client cash held by the platform dropped by 31 percent to £51.9 million, whereas the equity shareholders' funds strengthened by 5 percent to £10.3 million. The loss over net assets jumped to 34 percent from 32 percent in the previous year.

"The current strategic view of the Company's directors remains cautiously optimistic," the Companies House filing stated. "The Company demonstrated considerable resilience during the global COVID pandemic; however, the ongoing business operations and its ensuring financial performance have been very challenging throughout 2021 as it has also been operating under certain regulatory restrictions."

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Indeed, the broker has been facing some distress after acquiring the book business of now-collapsed SVS Securities in 2020. With the acquisition , ITI added around 21,000 new clients and £250 million of client assets, but the migration turned out to be a nightmare. The broker encountered several technical difficulties, and some of the "dissatisfied customers" directly complained to the Financial Conduct Authority.

"As a part of our dialogue with the FCA, we voluntarily agreed to certain restrictions until such time that these technical issues related to the clients of the distressed broker had been addressed," ITI added. The broker agreed not to take on new clients until its existing client base can undertake trading activities.

ITI Capital Exiting Retail Business

ITI decided to exit from the retail segment of its business to rectify the regulatory issues arising from migration difficulties.

"Following the SVS acquisition and all the ensuing difficulties that arose from or because of it, the Board felt that the company would be better positioned in the future to focus on developing its business for professional and institutional client services only," ITI stated. "We have commenced the exit for the retail business in June 2022, and we expect to wind down the retail side of the business by 21 December 2022, to ensure the best possible outcome is secured for all clients."

Meanwhile, the parent of ITI Capital Limited injected an additional £4 million into the company in 2022 to strengthen its financial and capital position. ITI will also use the proceeds in its restructuring process.