Copenhagen-based forex and CFD broker Saxo Bank has released its results for the first half of 2024, indicating a slight increase in revenue and a return to profitability after the company posted its first half-year loss in several years in the second half of 2023.
On the top line, Saxo Bank reported revenue of DKK 2,318 million (USD 345 million) for the first six months of 2024, up 4% from the nearly identical results of USD 333 million in the first and second half of 2023. Saxo’s net profit of DKK 464 million (USD 69 million) for the first half of 2024 was more than the company earned in all of 2023.
The results come at a turbulent time for the company, with Saxo Bank over the summer hiring investment bank Goldman Sachs to pursue an IPO or sale of the company to provide liquidity to the company’s two main outside shareholders, China’s Geely Group and Finland’s Mandatum Group, both of which have expressed a desire to exit their ownership positions in the company. Saxo Bank attempted an IPO in 2022 (via a SPAC merger), which was ultimately abandoned.
During 2024, Saxo Bank will introduce a new competitive pricing structure that will reduce costs for clients and improve the client experience, resulting in record numbers of clients and client assets. As of June 30, 2024, the number of end clients and client assets will increase to over 1.2 million. Client assets will amount to EUR 109 billion.
The company said volatility in financial markets was low in the first half of 2024, resulting in lower trading and investment activity, while higher interest rates and a positive inflow of client funds had a positive impact on the company’s financial performance.
Despite short-term burdens due to price reductions, total revenues increased slightly to EUR 311 million in the first half of 2024. Revenues were distributed almost evenly across the business areas – 34% to trader customers, 34% to investor customers and 32% to institutional customers.
In addition, S&P raised Saxo Bank’s rating from BBB to A- in the first half of the year, as evidence of the Saxo Bank Group’s strong financial position.
To increase focus, strengthen compliance, reduce risks and increase operational efficiency, Saxo Bank Group has initiated a restructuring of its distribution model in Asia Pacific, considering strategic opportunities for its offices in Hong Kong, Japan and Australia, while the Shanghai office is currently being closed. This has resulted in the recognition of restructuring costs of EUR 6 million in the first half of 2024.
The Saxo Bank Group expects adjusted net profit for the full year to remain within the previously forecast range of EUR 114 to 134 million.
Kim Fournais, CEO and Founder of Saxo Bank, commented on the results:
“The positive momentum we have experienced in the first half of the year is a strong indicator that our strategy is resonating with our clients. More than 1.2 million clients now trust Saxo with assets worth over EUR 109.38 billion. This is the result of our relentless focus on improving our investment platforms, products and services, as well as offering highly competitive pricing that enables our growing client base to get more from their money.
It is also encouraging to see that our clients are increasingly recognizing the value of diversifying their portfolios across different markets and asset classes. In these uncertain times, we remain fully focused on facilitating diversification across asset classes and making it easier and more attractive for investors to build healthy and profitable portfolios and manage their risks. Diversification really is the ‘only free lunch’ in investing – and we are here to provide the tools, product range and insights to help our clients manage their portfolios with confidence.”