Global financial services platform Marex Group plc today announced a set of strong results for the six months to 30 June 2023.

Net Revenue increased 86% period-on-period, primarily driven by higher commissions in both the Clearing and Agency and Execution segments as a result of increased client volumes on Marex’s platform, along with higher interest income due to the combination of higher interest rates and client balances in the period.

Front office costs represent staff, systems and infrastructure costs associated with running the revenue generating operations. These costs increased 70% to $334.6 million, largely as result of the ED&F Man Capital Markets acquisition.

Control and support costs include staff and property-related costs, along with professional fees and other administrative expenses associated with the support functions. These costs increased 108% to $159.8 million, again reflecting the impact of recent acquisitions resulting in higher headcount in our key control and support functions, as well as ongoing investment.

As a result of the Net Revenue and cost trends, Adjusted Operating PBT increased 111% to $124.5 million and margin improved to 20% in the period, from 18% in 2022 demonstrating the scalability of the platform. Adjusted Operating PAT increased 101% period-on-period to $94.1 million and Adjusted Return on Equity improved significantly to 29%.

The increase in net interest income in the period reflects the combination of higher interest rates, with an average Fed Funds rate of 4.75% in H1 2023 compared to 0.45% in the prior period, and a significant increase in client balances. Total client assets increased by 48% to $11.8 billion at 30 June 2023, compared to $8.0 billion at 30 June 2022, which includes both segregated balances and non-segregated funds.

Total client balances have declined during the period compared to 31 December 2022 as a result of lower margin requirements at exchanges, however, these lower margin requirements have supported increased client activity levels in other areas of the business, particularly the energy Agency and Execution business.

Ian Lowitt, Marex CEO, commented:

“We have delivered exceptionally strong performance in the first half of 2023, reflecting the strength and scalability of the diversified global platform we have built, which provides our growing client base with essential market connectivity and quality service. I am very proud of what the Marex team have delivered, both operationally and commercially so far this year. Our goal is to build a diversified global platform which allows us to do more business with each of our clients, and our improving margins and returns demonstrate the effectiveness of these platform economics.

The integration of ED&F Man Capital Markets, a strategically important acquisition, is progressing well. We have delivered several important integration milestones which will enable us to improve the efficiency of our operations as we continue to expand our global footprint. The business is delivering performance ahead of our expectations, and has transformed the scale and scope of the Group which will allow us to continue delivering on our track record of nine successive years of Operating PBT growth.

The outlook for Marex remains very positive. We are set to have another strong year in 2023. I am confident that we can continue to deliver sustainable growth and build an even more diversified, resilient and dynamic firm.”