Swissquote Limited, the British subsidiary of the Swiss brokerage group, has published its 2020 financials reporting a marginal uptick in its annual revenue. The firm only offers Forex and CFDs trading to private and corporate clients, and it generated a revenue of more than £2.7 million, which is up from the previous year’s £2.5 million.
These numbers came after the Swissquote Group reported a jump of 37.6 percent in its overall 2020 revenue with CHF 317.3 million, Finance Magnates reported earlier. Also, the net profit of the Group doubled at CHF 91 million.
Impact of Global Events
However, the UK subsidiary ended the year at a loss due to ‘expenses and other losses’. Further, there was some decline in the trading volumes which came in at £49.3 billion. The broker pointed out the impact of the ESMA restrictions, MFID2, and Brexit behind this slump, however, it is optimistic that the marketing slowdown is vanishing.
The company detailed that it trades with its clients as a principle and offsets all trades with its Swiss parent, taking no market risks. Its revenue is primarily generated from mark-ups and commissions applied to market spreads without the prime brokerage fees charged by the parent company.
As the revenue of the broker is directly tied with the trading volume, it is impressive that revenue numbers jumped despite a yearly dip in volume.
Moreover, Swissquote Limited detailed that the impact of the Brexit and the implications of the pandemic on the trading market reduced the number of new clients onboarded on its platform last year. It opened 1,520 new trading accounts in 2020, compared to 1,698 the year before.
However, the company presented a strong balance sheet with net equity standing at around £6 million by the end of the year.
Following Brexit, the UK subsidiary is now reviewing alternative business strategies to mitigate the negative impacts, focusing on strengthening its brand and opportunities in new markets and products.
