Saxo Bank reports lower than expected financial results in H1 2019

Saxo Bank reports lower than expected financial results in H1 2019

Copenhagen-based online broker Saxo Bank today reported a negative net profit of DKK 139 million for the H1 2019, compared to a positive net profit in H1 2018 of DKK 153 million.

H1 2019 highlights include:

  • Operating income: DKK 1,109.8 million (DKK 1,506.4 million H1 2018)
  • EBITDA: DKK 57.1 million (DKK 397.9 million H1 2018)
  • Adjusted EBITDA: DKK 125.1 million (DKK 431.2 million H1 2018)
  • Profit before tax: DKK (163.6) million (DKK 209.4 million H1 2018)
  • Net profit: DKK (139.0) million (DKK 153.3 million H1 2018)
  • Clients’ collateral deposits: DKK 130.8 billion (DKK 112.6 billion at the end of 2018)
  • Total equity: DKK 5,387 million (DKK 5,552 million at the end of 2018)
  • Total capital ratio: 31.9% (35.0% at the end of 2018)

LeapRate reminds that Saxo’s profit for 2018 was a record one, a 138% increase to the 2017 profit figures.

Operating income for the Group was down 26% compared to H1 2018 or DKK 1.1 billion. The total capital ratio for the Group was 31.9% as of 30 June 2019 compared to 35% at the end of 2018.

Saxo has also chosen to invest in lowering prices significantly across asset-classes which has a negative impact on short-term financial performance but is expected to further fuel future growth.

While the financial result is lower than anticipated, several leading business indicators have continued a favourable development.

The acquisition of BinckBank was completed 7 August 2019 following strong shareholder acceptance. More than 640,000 clients were added to the Saxo Group this way and approximately DKK 214 billion in client assets.

Kim Fournais Saxo Bank

Kim Fournais, Saxo Bank

Commenting on the results, Kim Fournais, CEO and founder of Saxo Bank, said:

The result is slightly lower than anticipated, primarily due to macro trends in the investment industry in general, which is facing headwinds with very low volatility and continued margin compression.

Despite headwinds in the industry, we remain fully committed to executing on our ambitious long-term strategy including record high investments in technology and our people. The key to success in this environment is scale and an optimal digital client experience.

A huge step in achieving scale has been done with the BinckBank acquisition, which marks a significant milestone in the history of Saxo Bank. We are very proud to welcome BinckBank to the now much larger Saxo Group adding 640,000 clients as well as approximately DKK 214 billion in client assets.

The acquisition will allow us to further step up investments in the digital SaxoExperience to cater for our clients in the best possible way, which is key to long-term growth and profitability.
In addition, we have seen a positive development in a number of leading indicators with a record intake of new clients in the first half of 2019, new highs in the onboarding and pipeline of high-profile wholesale partners as well as a significant increase in AUM.

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