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Copenhagen-based Multi Asset broker Saxo Bank has reported a net profit of DKK 158 million (about USD $24 million) for the first six months of 2016. Client collateral deposits continued to rise at Saxo Bank, up by DKK 6 billion compared to H1 2015, to reach a record high of DKK 82 billion.
Revenues at Saxo Bank reached DKK 1.5 billion (USD $219 million) in the first half of the year, a significant increase compared to the first half of 2015, which was adversely impacted by the decision by the Swiss National Bank to remove the fixed floor between the Swiss franc and the euro.
Saxo Bank continued to strengthen its capital base. As of June 30, 2016, the Common Equity Tier 1 ratio, the Tier 1 capital ratio and the Total capital ratio for the Group were 16.0%, 18.5% and 21.5% respectively, compared with 14.8%, 17.4% and 20.7% as of year end 2015.
Financial highlights for First Half 2016 at Saxo Bank:
- Operating income (Revenues): DKK 1,459.1 million (DKK 751.5 million in H1 2015)
- EBITDA: DKK 429.1 million (DKK -297 million in H1 2015)
- Adjusted EBITDA: DKK 479.0 million (DKK 494.8 million in H1 2015)
- Profit before tax: DKK 216.3 million (DKK -592.5 million in H1 2015)
- Net profit: DKK 158.2 million (DKK -484.6 million in H1 2015)
- Clients’ collateral deposits: DKK 82,032 million (DKK 76,007 million in H1 2015)
- Total equity: DKK 4,077.8 million (DKK 4,095.7 million in H1 2015)
- Total capital ratio: 21.5% (20.7% at the end of 2015).
Commenting on the results, Kim Fournais, CEO and co-Founder of Saxo Bank, said:
The positive result for first half of the year is testament to our unwavering commitment to innovation and technology to enable our clients to meet their investment and trading needs. I strongly believe that we have the foundation for even stronger growth going forward, as recent product launches complement our existing strong offering and allow us to cater to new clients segments, such as the launch of the market’s first fully digital bond trading solution and SaxoSelect, our digital and automated investment service, aimed at clients looking for a discretionary way of participating in global financial markets.
Saxo Bank continued to deliver on its diversification strategy, which is underpinned by its ability to be a trading and investment facilitator for retail and institutional clients alike. The company noted highlights of the first part of 2016 which included:
- Continued momentum on the flagship platform SaxoTraderGO which has become the most successful platform launch in the history of the company, with widespread adoption among retail and institutional clients.
- With SaxoSelect, Saxo Bank entered the automated investment management space, widening its client offering to also incorporate a new client segment: clients who want to participate in global financial markets, through both active and passive portfolios, but are looking for a discretionary way of doing so. In collaboration with among others BlackRock and Morningstar, Saxo Bank is able to offer clients a form of digital asset management with competitive fees and full transparency, fully integrated in SaxoTraderGo.
- Saxo Bank also recently announced the launch of a fully digital bond trading solution, giving clients direct access to a universe of more than 5,000 government and corporate bonds including more than 3,400 developed-market and 1,600 emerging-market bonds. Clients get the best price from up to 40 of the world’s largest banks and liquidity providers, leading to lower trading costs and a faster and transparent solution for bond traders. This is an opportunity for Saxo Bank to bring efficiency to and gain market share in a significant asset class, further completing its multi-asset offering.
- Saxo Bank has also continued to open access to new markets through partnerships, including entry into the Chinese market through strategic partnerships for example Wallstreet CN. Lastly, the first half of 2016 shows an increase in the on-boarding of Hedge Funds, as well as continued strong traction for Saxo Bank’s FX Prime Brokerage and API Solution.
For the first part of 2016, client acquisition levels have been roughly on par with previous years at Saxo Bank, but at a significantly reduced cost.