Swissquote reports record-high net revenues for H1 2023
Swissquote, Switzerland’s market leader in online banking, today posted a set of solid metrics for the first half of 2023.
Net revenues reached CHF 265.6 million in the first half of 2023, an increase of 32.8% compared to the year-ago period. Non-transaction-based revenues (e.g. net interest income and custody fees) were the main contributors to the growth. In a context of low market volatility, these non- transaction-based revenues surpassed the level of transaction-based revenues (e.g. brokerage in- come) for the first time.
Net interest income grew significantly by 587.6% to CHF 102.7 million thanks to a higher interest rate environment.
Trading activity was low compared to the previous year (number of transactions down by 26.7%) but improved slightly compared to the second half of 2022. Net fee and commission income decreased by 9.3% to CHF 73.7 million but is up 9.1% compared to the previous half year.
Net crypto assets income declined by 61.5% to CHF 7.5 million, in line with management’s expectations and activity observed in the last months of 2022.
Net eForex income saw an increase of 1.1% to CHF 54.9 million despite a period of low market volatility. Net trading income fell by 10.8% to CHF 26.7 million, due again to lower trading volumes.
Swissquote reported its second-highest pre-tax profit as more than half of the increase in net revenues impacted positively on profitability. Total expenses grew by 30.0% to CHF 138.4 mil- lion, mainly due to adjustable items such as marketing expenses (+35.2%) and higher variable remuneration expense that impacted on payroll and related expenses (+31.0%). During the last 6 months, total headcount increased from 1,056 to 1,110 (+5.1%), mainly attributable to positions in technology and at foreign subsidiaries.
Overall, net profit grew by 38.2% to CHF 106.5 million. The pre-tax profit margin increased to 47.0% from 45.3% compared to the year-ago period. The net profit margin went up to 40.1% from 38.6%.
The number of client accounts grew by 6.4% to 555,266 in the last 12 months. Client assets in- creased by 9.9% to a new all-time high of CHF 56.9 billion. Net new money decreased by 39.9% to CHF 3.0 billion but was purely organic (while last year included the acquisition of Keytrade Bank Luxembourg for CHF 1.7 billion). As of 30 June 2023, the portion of cash in client assets was at 16.6%.
In the first half of 2023, the total balance sheet increased by 3.5% to CHF 10.6 billion. As of 30 June 2023, cash and balances held with central banks (e.g. Swiss National Bank) represented more than 40% of total assets. At the same time, total equity increased by 6.8% to CHF 791.6 million. The capital ratio remained stable at 25.5 % compared to 24.8% at the end of last year. The balance sheet liquidity remained solid, with the liquidity coverage ratio evolving on a monthly basis in the region of 400%, significantly above the 100% minimum regulatory requirement.
Although no recovery in market sentiment is expected for the second half of 2023, Swissquote anticipates results similar to those reported for the first half of the year. Nevertheless, the underlying assumptions have shifted towards a generally higher share of non-transaction-based revenues in comparison to the initial guidance published.
For the year as a whole, net revenues and pre-tax profit are now expected to be approx. CHF 530 million (initially: CHF 495 million) and approx. CHF 250 million (initially: CHF 230 million) respectively.