Leading Swiss online trading firm Swissquote has released its first half results for 2020, indicating that the company posted record Revenues and Profits for a six month period.

The results were not surprising, in that we reported back in June that Swissquote was seeing a 40% rise in Revenues during the first months of 2020, with client trading activity and new client signups driven by the Covid-19 pandemic fed market volatility. Swissquote shares continued to trade up to new all-time highs in recent months.

Overall, in the first half of 2020 Revenues at Swissquote were up 36% from 2H-2019, while profits more than doubled, up 123%. Swissquote said that it surpassed all expectations: 57,258 new clients accounts were opened, and net new money inflow was CHF 3.0 billion.

Trading volumes averaged $115 billion monthly at Swissquote during 1H-2020.

For the year as a whole, Swissquote has revised its forecasts sharply upwards: it anticipates a pre-tax profit of CHF 100 million on revenues of CHF 300 million.

Operating revenues reached a new record level of CHF 162.7 million (CHF 117.2 million) — an increase of 38.9 percent compared to the prior-year period. When adjusted for negative interest rates (-CHF 1.9 million) and fair value adjustments (-CHF 0.1 million), net revenues amounted to CHF 160.7 million, 43.2 percent up from the previous year (CHF 112.2 million).

Swissquote said that the continuing massive influx of new clients since the beginning of the year, combined with the
high volatility on the financial markets, led to a significant increase in transactions (3,018,239 transactions) and trading volumes in the first half of the year. This trend generated very large increases in revenues in the two most important segments — fee & commission income and eForex. Thus, net fee & commission income climbed by 82.7 percent to CHF 83.4 million (CHF 45.6 million).

Business with cryptocurrencies contributed CHF 4.8 million (CHF 3.1 million) to fee & commission income. Net eForex income increased by 52.2 percent to CHF 60.0 million (CHF 39.5 million) on a trading volume of USD 690.4 billion. The interest business continues to be dominated by negative interest rates, and in the first half of the year it was additionally affected by the announcement of an interest rate cut on the USD. The SNB’s negative interest rates nevertheless showed a positive trend: the interest-free allowance increased from CHF 840 million to CHF 1.7 billion. This reduced the negative interest burden by CHF 3.1 million to CHF 1.9 million despite an 8.9 percent increase in the balance sheet to CHF 7.0 billion. Total net interest income nevertheless fell by 21.7 percent to CHF 16.6 million (CHF 21.2 million). Net trading income amounted to CHF 2.8 million (CHF 10.9 million).

At CHF 102.3 million, operating expenses were 17.4 percent higher than in the first half of 2019 (CHF 87.1 million). The increase was mainly due to higher personnel costs (+CHF 9.4 million), half of this being attributable to the increase in the variable remuneration provision and the remainder to 65 additional employees. The 43.2 percent increase in net revenues combined with the rise in operating expenses of just 17.4 percent resulted in absolute record profit figures. Pre-tax profit rose by 132.8 percent to CHF 58.4 million (CHF 25.1 million), while the pre-tax profit margin reached 36.4 percent (22.4 percent). At CHF 50,4 million (CHF 22,0 million), net profit was up 128.5 percent year-on-year, with a net profit margin of 31.4 percent (19.6 percent).

Even after the purchase of Internaxx and payment of the dividend, the Basel Ill core capital ratio remains high at 20.8 percent (22.4 percent). Swissquote therefore remains one of Switzerland’s best-financed banks. Total equity increased by 15.3 percent to CHF 411.4 million (CHF 356.9 million).

Net new money inflow from purely organic growth also hit a new record and came in at CHF 3.0 billion (previous period: CHF 1.2 billion from organic growth and CHF 2.2 billion from the integration of Internaxx Bank). Despite difficult market conditions in the first half of the year, client assets grew by 9.7 percent to CHF 33.5 billion (CHF 30.5 billion). As at the end of June 2020, clients held assets of CHF 32.6 billion (410.2 percent) in trading accounts, CHF 255.3 million (—5.3 percent) in savings accounts, CHF 235.6 million (+5.3 percent) in Robo-Advisory accounts and CHF 384.9 million (-12.5 percent) in eForex accounts. The total number of accounts grew by 57,258 (+16.9 percent) to a record 396,430. The breakdown of accounts is as follows: 315,185 trading accounts (+19.3 percent), 19,279 savings accounts (—3.4 percent), 4,147 Robo-Advisory accounts (+39.7 percent) and 57,819 eForex accounts (+11.2 percent).

In the first half of 2020, Swissquote implemented various projects, all of which were designed to expand and improve its range of services. For example, all customers at Swissquote Bank Europe SA in Luxembourg were successfully migrated to Swissquote’s new eTrading platform. Société Générale became a new issuer on Swiss DOTS.

Since March 2020, the following seven new cryptocurrencies have been tradable on Swissquote: EOS (EOS), Stellar Q<LM), Chainlink (LINK), Tezos (XTZ), Ethereum Classic (ETC), Augur (REP) and Ox (ZRX). Online trading was also introduced for four additional stock exchanges: Australia, Singapore, Spain and Hong Kong.

The continuation of the gratifying business trend and strong growth in new customers also led to good results in July. Pre-tax profit for the month of July 2020 came to CHF 10 million. For the year as a whole, Swissquote is now expecting a pre-tax profit of CHF 100 million on revenues of CHF 300 million.