Alpha FX Group plc (LON:AFX), a provider of FX risk management, accounts and payments solutions dedicated to global corporates and institutions, today announced a trading update for the year ending December 2022.

The company says its revenue continues to grow strongly in line with recent upgraded expectations, with consistent month-on-month growth against the prior year.

Profit is forecast to be materially ahead of expectations as a result of the interest rate environment generating additional income from Alternative Banking’s overnight cash balances.

The Group has benefited from additional income as a result of the rising interest rate environment. This interest is being generated against sterling, euro and dollar denominated client funds that are held overnight and off balance sheet as part of the Group’s safeguarding arrangements for its Alternative Banking solution. This additional interest income is expected to contribute circa £6 million between the end of August and December 2022 and therefore result in profits for the year being materially ahead of expectations.

Whilst this is a positive boost for the Group and a natural by-product of Alpha FX accounts solution, the company is mindful that it is an uncontrollable income stream for the business and, if it returns to a low interest rate environment, a potentially transitory one. It has therefore chosen to recognise this as ‘other operating income’, not revenue.

Client default rates remain in line with Alpha FX’s expectations at the start of the year, despite subsequent macroeconomic pressures and extreme FX market volatility.

The Group continues with its accelerated investment programme in its Alternative Banking division, as outlined in its H1 results statement, alongside its investments in the global expansion of the FX Risk Management division.

Regulatory license has been granted in Australia, with the team now expanding and already generating revenue.

The company introduced its new website and had its brand refreshed at the start of October.