Australia is considered one of the mature markets for forex and contracts for differences (CFDs); however, for CMC Markets (LON: CMCX), it turned out to be very lucrative. The London-listed broker generated more than £62.3 million in revenue from the land down under in the second half of the last fiscal year, which was even higher than its business in the United Kingdom.
CMC’s Australia Bet Pays Off
Interestingly, it was the second half-yearly revenue period in which CMC's Australian revenue surpassed that from its home turf. The first time the Australian business outperformed the UK was in H2 FY23. However, figures from both markets were lower than the latest ones—Australia brought in £45.4 million, while the UK generated £39.3 million.
While CMC strengthened its presence in Australia, IG Group (LON: IGG) seems to be losing ground there. IG brought in over £65 million from its Australian operations in H1 FY21, which shrunk to £41.1 million in H2 FY24.
Plus500, another London-listed broker headquartered in Israel, suffered a similar fate to IG. It earned $24.8 million in revenue in the first six months of 2024, which is 155 percent lower than its peak in H1 2020. Although Plus500’s Australian revenue recovered in H1 2022, it has since dropped, settling around the mid-$20 million range.
However, CMC's surge in Australia seems to be boosted by its white-label stockbroking partnership with Australia and New Zealand Banking Group (ANZ), implemented in 2019, which involved migrating more than 500,000 clients to the brokerage platform.
In an earlier interview with Finance Magnates, Michael Bogoevski, the Head of Institutional ANZ at CMC Connect, explained that before the ANZ deal, CMC “had a retail business, and we were offering white-label solutions to second-tier banks.” He added: “That deal had 200 partner clients attached to the retail book… At its peak, we had five white-label deals, which is pretty much the majority of the Australian stockbroking market.”
Interestingly, CMC started reporting its Australian revenue separately in fiscal 2023, before which it reported figures from APAC and Canada together. At its peak, in the six months between April and September 2020, the broker brought in £95.3 million in revenue from the APAC and Canada markets.
IG Remains the UK King
IG Group, publicly traded with a market cap of £3.39 billion, generates most of its business from the UK market. Between December 2023 and May 2024, the broker brought in £147.6 million out of its total half-yearly trading income of £442.5 million. The US is second for IG, generating £77.5 million, followed by the EU with £54 million. Singapore, a small island of 5.8 million people, generated £37.3 million in revenue for IG in H2 FY24, compared to £41.1 million from Australia and £39.6 million from Japan.
Notably, IG’s income from the US exploded after it acquired tastytrade in the country for $1 billion in mid-2021.
Meanwhile, Plus500’s major market is the European Economic Area (EEA), from which it generated $169.6 million in the first six months of 2024. Despite its roller-coaster revenue amid the pandemic, its current UK revenue is significantly higher than pre-pandemic levels.
Plus500’s second-biggest market is outside the EEA, the UK, and Australia, categorized as the “rest of the world.” From there, it generated $169.3 million in H1 2024, just behind the pandemic peak of $174.4 million.
The geographical revenue distribution of Plus500 also shows its shrinking presence in the UK and Australia. At $34.5 million, its latest revenue from the UK is higher than pre-pandemic levels but significantly lower than most post-pandemic periods. The same can be said for its revenue from the Australian market.
Small Size, but Big Traders
While CMC moves ahead in Australia, IG has shown that traders in Singapore can be among the most lucrative. On average, each Singaporean trader generated £4,914 in revenue for IG, the highest for the broker (only after institutional revenue per client). In comparison, this figure for clients in the UK and Australia was £3,054 and £2,977, respectively. However, the EMEA non-EU market remains lucrative for IG, with £4,463 as revenue per client.
Despite the size of IG and Plus500, CMC beats its London-listed competitors in terms of profitable clients. The most recent half-yearly average revenue per client at CMC came in at £2,818, compared to $2,264 for Plus500 and £2,403 for IG.
