Swiss brokerage Swissquote has reported that its net revenues for the first half of 2015 increased by 5.2 percent when compared to the same period last year, coming in at CHF 74 million ($77 million).
Due to the special provisions made by the bank in the aftermath of the Swiss National Bank move impacting the EUR/CHF Exchange rate, the company registered its first half-year report which did not present a net profit. The company lost CHF 10.6 million ($11 million) after its initial SNB related provisions of CHF 25 million ($26 million) impacted the bottom line for the first half of 2015 with CHF 20.5 million ($21.3 million).
Pretax profits were lower by 11.1 percent at CHF 11.7 million ($12.2 million) due to substantially higher marketing costs (up by 47 percent).
Higher Marketing Costs
During the first half of 2015, the company’s marketing expenses skyrocketed by 47 percent when compared to last year, shedding some light on the Manchester United deal. In January, Swissquote announced that it has become the official global Forex and online financial trading partner.
The football partnership which Swissquote signed is materially different to a number of others in the industry due to the global reach of the broker's marketing efforts in using the Manchester United brand. This contrasts to a number of other partnerships signed by brokers, where the terms of the partnership are constrained to a local country level.
According to estimates made by Finance Magnates, the higher marketing costs reported by Swissquote for the first half of 2015 could signify that the deal with Manchester United cost up to CHF 3 million ($3.12 million). This is the net increase for the first half of 2015 of Swissquote's marketing costs, but the cost of the Manchester United deal is a rough estimate, since the company could have ramped up advertising campaigns spending in the aftermath of the Swiss National Bank disaster.
Client Accounts and Monies Growth
The number of client accounts in the first half of 2015 has grown substantially - a total of roughly 8,000 new accounts were registered with Swissquote during the first half of 2015. Electronic foreign exchange segments of Swissquote's business has grown the fastest with about 2,500 new accounts being added, totaling 24,085, an increase of 11.9 percent.
The total increase in client accounts was about 3.7 percent, marking 227,223 accounts. Breaking down the number outside of eFX, trading accounts increased by 2.7 percent to 169,664, as savings accounts were up by 2.3 percent to 32,166 and ePrivate accounts grew by 22.5 percent to 1,308.
Net new client monies have increased by 27.1 percent when compared to last year, marking CHF 580.2 million ($602.7 million).
Full Year Outlook
Swissquote expects to see an increase of profits for the full year in 2015 with net revenues increasing about 10 percent, while net new client funds rising to over CHF1 billion ($1.04 billion). Elaborating on its partnership with Swiss bank PostFinance, the company is expecting to launch its product this fall.
The continued growth should in part be impacted by the ongoing global partnership with Manchester United, which has secured access to a wide fan database totaling over 650 million members.
