Swissquote listed record-breaking results for 2017 business year and saw a 25% rise in net revenues. What has contributed to this significant increase? Based on the increase, what are shareholders entitled to? These and more are highlighted in the Swissquote 2017 Financial Year report.
2 March, Swissquote – Compared with the previous year, total net revenues increased by 25.0 percent to CHF 187.8 million while net profit grew by 88.8 percent to CHF 39.2 million and client assets were up 29.9 percent at CHF 24.1 billion. For 2018, Swissquote is expecting net revenues and earnings to continue growing by approximately 10 percent.
25% Rise in Net Revenues
Net revenues of CHF 187.8 million (CHF 150.2 million) were once again impacted by negative interest rates (-CHF 7.5 million). All four divisions contributed to the exceptional result. Thanks to a year-on-year increase in the number of transactions by 310,000 to 2.6 million, net fee & commission income grew by 22.5 percent to CHF 85.2 million (CHF 69.5 million).
The number of transactions per customer per year remained stable at 11.0. However, other factors that contributed to the pleasing results included the growing importance of robo-advisory services (ePrivate Banking), successful trading in derivative products via Swiss DOTS, and trading in cryptocurrencies. eForex income increased by 26.2 percent to CHF 66.7 million (CHF 52.8 million).
The strong growth is explained by the significant increase in new clients (+29.0 percent) and the significant increase in client assets belonging to eForex clients (+45.5 percent). Net trading income (currency trading excluding eForex) grew by 32.7 percent to CHF 22.3 million (CHF 16.8 million).
Net interest income increased by 27.8 percent to CHF 19.7 million (CHF 15.4 million) owing to growth in Lombard loans issued and steadily rising US short-term interest rates.
Swissquote 2017 Financial Year report: Near doubling of earnings
At CHF 142.0 million (CHF 127.0 million), operating expenses were 11.8 percent higher in 2017 than in the previous year. The increase in expenses was mainly due to continuing heavy investment in technology, marketing and staff, whose numbers grew by 43 to 593. While operating expenses increased by CHF 14.9 million, net revenues rose by CHF 37.5 million.
In line with this trend of expenses and revenues, all earnings figures rose sharply: pre-tax profit jumped by 97.3 percent to CHF 45.8 million (CHF 23.2 million), the pre-tax profit margin increased to 24.4 percent (15.4 percent), net profit surged by 88.8 percent to CHF 39.2 million (CHF 20.8 million) and the net profit margin climbed to 20.9 percent (13.8 percent).
The capital ratio (CET 1) stood at 26.1 percent (24.5 percent). This means that Swissquote remains one of Switzerland's best-financed banks. Total Equity amounted to CHF 295.1 million (CHF 280.8 million).
Record level of client assets
2017 also saw client assets increase by a substantial 29.9 percent to CHF 24.1 billion (CHF 18.6 billion). The net new money inflow amounted to CHF 2.7 billion. As at the end of 2017, assets of CHF 23.0 billion (+31.6 percent) were held in trading accounts, CHF 600.6 million (-20.8 percent) in saving accounts, CHF 203.1 million (+75.2 percent) in Robo-Advisory accounts and CHF 328.9 million (+45.5 percent) in eForex accounts.
The total number of accounts grew by 6,511 (+2.2 percent) to 309,286 (302,775). The breakdown is as follows: 236,861 trading accounts (+0.3 percent), 28,955 saving accounts (-11.9 percent), 1,898 Robo-Advisory accounts (+22.3 percent) and 41,572 eForex accounts (+29.0 percent).
Major success in cryptocurrency trading
From mid-2017, Swissquote became the first European online bank to offer its clients the opportunity to invest in cryptocurrencies and trade in them against the EUR or USD. The service was initially confined to Bitcoin, but since December Bitcoin Cash, Ether, Litecoin and Ripple have also been available. With five leading cryptocurrencies, Swissquote now has a larger offering of virtual currencies than any other bank.
Clients invest and trade in cryptocurrencies through their ordinary Swissquote trading account in the same way as with any other currencies, shares or funds. The sharp increase in interest in cryptocurrencies, particularly in the fourth quarter of 2017 (revenues of CHF 5.6 million in 2017), led to a flood of new accounts being opened towards the end of the year.
The impact of the new accounts on revenues will only be clearly noticeable in the figures for the first half of 2018.
Shareholders to benefit from higher dividend
In light of the very good business results, the Board of Directors will propose to the Annual General Meeting of Swissquote Group Holding Ltd, to be held on 4 May 2018, a distribution of CHF 0.90 per share of which CHF 0.86 as a dividend and CHF 0.04 as a reimbursement of Reserves from capital contributions. For more information, please read the complete 2017 Financial Report of Swissquote.
This article Swissquote 2017 Financial Year report was provided by Swissquote. While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein.
This document does not constitute a recommendation to sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investments.