The Financial Times is reporting that global brokerage house IG Group said that it could face a hit of up to £30m ($45m) after the Swiss franc shot up near 30% and settled near parity with the euro following the Swiss National Bank’s decision to remove its longstanding exchange rate peg of 1.20 EUR/CHF.
An official statement in a filing with the London Stock Exchange read the following:
Following this morning’s exceptional announcement by the Swiss National Bank, which resulted in a sudden and extreme movement in the value of the Swiss Franc, IG Group Holdings plc (“The Company”, “The Group”, “IG”) believes it is appropriate to provide an update on the negative financial impact to the Group. The precise level of the impact will be partially dependent on the Company’s ability to recover client debts, but in total it will not exceed £30 million, from market and credit exposure.
The statement went on to disclose:
The market exposure occurred where client positions were closed at a more beneficial level than the Company was able to close its entire corresponding hedge due to the market dislocation.
The London based provider of contracts for difference (CFDs) and financial spread betting, and one the UK’s largest Forex trading providers stressed that the loss came against a “backdrop of very strong recent and current performance and IG’s extremely robust financial position. IG Group (LON:IGG) shares were trading down a little over 4% on the news.
For the official statement from the LSE, click here.