Swissquote posts record client assets H1 2019

6 August, 2019 (Gland / Zurich)- Swissquote reported net revenues of CHF 112.2 million (115.117 USD) for the first half of 2019, equaling the high figure posted in the same period of the previous year. In line with expectations, pre-tax profit of CHF 25.1 million (USD 25.753 million) was lower year-on-year. On the strength of net new money inflow of CHF 3.4 billion (USD 3.489 billion) and a solid market performance, client assets exceeded the CHF 30 (USD 30.783) billion mark for the first time. For the year as a whole, Swissquote continues to project growth in net revenues of 5 to 10 percent. Key strategic projects Internaxx and Singapore showed encouraging results. The pre-tax profit forecast for 2019 of CHF 44 million (USD 45.15 million) made in March has been revised to CHF 48 million (USD 49.255 million).

Strategic expansion yielding successes In the first half of 2019, Swissquote achieved two major milestones in terms of implementing its long-term growth strategy: On the one hand, following finalization of the acquisition of Internaxx Bank, this Luxembourg-based bank was fully integrated into the Swissquote Group on 22 March. The Internaxx figures were consolidated into the Swissquote figures effective 23 March. Over a period of just over three months, Internaxx contributed CHF 3.5 million to the result (CHF 1.3 mil-lion in net fee & commission income, CHF 1.8 million in net interest income and CHF 0.4 million in net trading income). On the other hand, on 30 July the Monetary Authority of Singapore (MAS) granted a Capital Market Service License (CMSL) to Swissquote Pte Ltd, which was founded in Singapore.

Revenues stable At CHF 117.2 million, operating revenues remained stable compared to the very strong first half of 2018 (CHF 118.0 million). However, they were up almost 10 percent against the second half of 2018. The impact of negative interest rates of -CHF 5.1 million (CHF -4.2 million) led to net revenues of CHF 112.2 million, likewise in line with the year-back level (CHF 112.8 million). Owing to a significant year-on-year decline in cryptocurrency business (-CHF 4.8 million) as well as the previously communicated weak start to trading in the first few months of 2019, net fee & commission income was 17.9 percent lower at CHF 45.6 million (CHF 55.6 million). Net eForex income was up 12.5 percent to CHF 39.5 million (CHF 35.1 million). This growth was due to a 33.8 percent increase in assets held in eForex accounts to CHF 439.8 million. In addition, margins were generally improved. Net interest income increased by a substantial 35.8 percent to CHF 21.2 million (CHF 15.6 million). Net trading income (currency trading excluding eForex) was down slightly by 6.8 percent to CHF 10.9million (CHF 11.7 million).

Controlled costs and high total equity Operating expenses increased year-on-year by 6.3 percent to CHF 87.1 million (CHF 82.0 million). This rise in expenses was mainly attributable to higher personnel costs (+9.0 percent) following the Internaxx integration in particular. The number of employees grew by 65 (37 of which at Internaxx) to 698. Higher expenses and unchanged revenues result in a lower pre-tax profit of CHF 25.1 million (CHF 30.8 million) and a pre-tax profit margin of 22.4 percent (27.3 percent). Net profit was 14.3 percent lower at CHF 22.0 million (CHF 25.7 million) and the net profit margin decreased to 19.6 percent (22.8 percent).

On the occasion of the full year 2018 presentation, Swissquote announced a decrease of approximately CHF 10 million in pre-tax profit for 2019 owing to one-off costs for the integration of Internaxx, the founding of Swissquote Pte Ltd. as well as outlays for a Brexit contingency plan. Based on current estimates, Swissquote is now projecting only a CHF 6 million decrease in 2019 pre-tax profit. Out of this one-off costs of CHF 1.2 million were incurred in the first half and a further CHF 5 million are forecast for the second half of 2019. In addition, CHF 1.8 million are projected in 2020 (total: CHF 8 million).

The capital ratio stood at 22.4 percent (27.5 percent). Accordingly, Swissquote remains one of Switzerland’s best-financed banks. Total equity increased by 9.6 percent to CHF 356.9 million (CHF 325.7 million).

High net new money inflow The high net new money inflow of CHF 3.411 billion (CHF 2.421 billion) comes from organic growth (CHF 1.2 billion) and from the integration of Internaxx Bank (CHF 2.2 billion). Client assets increased by 19.5 percent to CHF 30.520 billion (CHF 25.533 billion) in the first half due to the high new money inflow and as a consequence of the general stock market trend. As at the end of June 2019, clients held assets of CHF 29.585 billion (+20.9 percent) in trading accounts, CHF 269.7 million (-45.7 percent) in saving accounts, CHF 225.8 million (-1.1 percent) in Robo-Advisory accounts and CHF 439.8 million (+33.8 percent) in eForex accounts.

The total number of accounts rose by 17,140 (+5.3 percent) to a record-high 339,172 (322,032). The breakdown is as follows: 264,210 trading accounts (+5.8 percent), 19,962 saving accounts (- 26.0 percent), 3,026 Robo-Advisory accounts (+27.2 percent) and 51,974 eForex accounts (+20.9 percent). Since the saving account business has for some time no longer been profitable for Swissquote, the collaborative venture with Swiss Life was terminated effective 31 December 2018. This factor explains the significant decrease in the number of saving accounts, as well as in the corresponding volume of assets, in the first half of the year.

The complete financial report for the 1st half of 2019 is available here: