FNG Exclusive… FNG has learned via regulatory filings that FCA regulated FX and CFDs broker GKFX Financial Services Ltd has sharply cut its losses in 2020, although the company continues to downsize and see reduced revenues.
After reporting a near £9 million loss in 2019, GKFX UK saw a loss of £2.9 million in 2020. Revenues fell from £3.6 million in 2019 to £2.7 million in 2020 – revenues at GKFX UK were as high as £94 million in 2016 and £60 million in 2017.
Revenues at GKFX UK are generated predominantly through a volume rebate with a counterparty that is related to the company by common ownership. The risk management strategy is based on highly automated flow management which dynamically hedges client exposures and risk.
As a result of implementing strategic changes during 2019, revenues and expenses have significantly reduced from historic levels. Revenues reduced as the company’s retail business was curtailed (in favor of working only with Professional and Wholesale clients), and expenses decreased primarily as lower staffing levels were required to support the much smaller ongoing client base. GKFX UK reduced staffing from 81 employees in 2019 to 35 in 2020.
The GKFX group is controlled by Turkish businessman Kasim Garipoglu, through his Global Kapital Group (GKG). In 2019 GKG restructures its operations, moving the Retail FX brokerage business from GKFX UK to AKFX Financial Services Ltd, based and regulated in Malta. AKFX is a related party to GKFX by virtue of common ownership, and AKFX (Malta) now operates the “GKFX” brand. The FCA regulated UK company now runs under the GKPro brand, as noted above aimed at Professional and Wholesale clients.
GKFX UK’s 2020 income statement and balance sheet follow: