GMO-Z.com UK posts £1.1M loss in 2021 in shift to institutional
GMO-Z.com Trade UK Ltd, the London arm of Japan’s GMO Click Securities – the world’s largest retail forex broker by volume – the has filed its financial report for 2021 indicating that the company saw a £1.1 million loss in the year ended December 31, 2021, as GMO shifted its operations in Europe to institutional-only.
Overall, Z.com UK actually saw a modest rise in revenues in 2021 to £416,000, from £205,000 in 2020, with its net loss for the year cut from £1.7 million to £1.1 million. Due to a reorganisation of the company’s business model and strategy (more on that below), there were some changes in portfolio whereby the firm carried out a system migration in order to better service its institutional clients, which commenced in the second half of 2021.
Z.com UK provides Spot FX liquidity services to institutional clients. The company accepts clients from a number of regions around the world, however its core liquidity provision and matching engine are located in London, with plans to later expand its pricing capabilities geographically.
As was exclusively reported here by FNG back in December, GMO made a decision to relinquish Z.com UK’s FCA license, applying to do so late last year. (As far as we know the license is still in effect, however). The decision was taken since as noted above Z.com UK decided to focus solely on agency Spot FX liquidity services, utilizing the company’s strong network of robust liquidity provision from the interbank market. That business is not considered regulated activity in the UK and as such does not require an FCA license (as would rolling spot forex and CFDs, Swaps, or Options), and therefore the company decided that it didn’t need the extra cost, required capital, or regulatory burden of maintaining its FCA license.
The decision to relinquish its FCA license has indeed freed up capital for the group, with GMO-Z.com UK reducing its paid-in capital base from £14 million in 2019 to £1.5 million today, moving out £12.5 million in capital to other GMO group entities.
Looking forward, Z.com UK stated that it has launched its institutional services into a highly competitive market, where long-established competitors hold substantial market share. The company’s strategy for acquiring and retaining clients will focus on tight pricing, superior client service and providing market leading technology. Enhancements will be developed using feedback gathered directly from clients, to ensure it provides the optimal trading environment and conditions.
GMO-Z.com Trade UK Ltd’s 2021 income statement and balance sheet follow below.