Swissquote, Switzerland’s largest online bank, had a 14 percent lower profit in the first half, in large part due to costs in connection with its expansion and a drop in crypto-trading. It revised up the forecast for full-year pretax profit.
Net income at Swissquote declined to 22 million Swiss francs ($22.6 million) in the first six months of 2019, down from 25.7 million in the same period of 2018.
Operating revenues were almost flat at 117.2 million francs, while net fee and commission income plunged 18 percent to 45.6 million – mainly because of lower cryptocurrency trading volumes and a weak start to trading in the first few months of the year.
Expansion Leads to Higher Costs
Income from the foreign exchange business by contrast added 13 percent to 39.5 million francs, with assets held in forex accounts increasing by 34 percent. Net interest income also grew at a healthy pace to 21.2 million from 15.6 million a year ago.
Operating costs were up by 6.3 percent, boosted by higher personnel costs following the integration of Luxembourg’s Internaxx. The number of staff increased by 65 to 698. With flat revenues and higher costs, pretax profit dropped to 25.1 million from 30.8 million.
Pretax Outlook Revision
Swissquote earlier this year announced that pretax would decline by 10 million francs due to one-off costs for the integration of Internaxx, the founding of a Singapore branch and outlays for a Brexit contingency plan. The announcement had led to a drop of the share price. Today, Swissquote revised its pretax forecast for 2019 to 48 million from a previous 44 million on lower one-off costs.
Client assets increased to 30.5 billion francs from 25.5 billion due to the new money inflow and the stock market trend. The number of accounts rose 5.3 percent to 339,172. Robo advisory accounts added 27 percent and eForex accounts rose 21 percent.
