Swiss exchange and payment systems operator SIX's first-half operating income was boosted by its Spanish acquisition, but its net profit still fell substantially.
Swiss exchange operator SIX’s net profit fell 41.3 percent year on year in the first half of 2021 to 108.2 million Swiss francs ($117.8 million) despite a 19.5 percent boost in its operating income to 745.8 million francs, it said in its results statement Friday.
SIX attributed the rise in operating income to the takeover of Spanish exchange operator Bolsas y Mercados Españoles (BME) in June 2020. However, it added that the adjusted pro forma figures, including BME’s results from the first half of 2020 show a fall of 2.4 percent.
SIX said the fall in net profit was above all due to the substantial contribution from investments such as Worldline in the previous year. There were no such effects this year.
Base Effect, UK Deal Hit Volumes
The much lower volumes traded than a year earlier - with a fall on SIX of 32% and BME of 21% - were almost entirely offset by by the other business units.
Debit card transactions recovered rapidly from the negative effects of the pandemic, while ATM transactions did not return to pre-pandemic levels.
Six largely attributed the drop in exchange volumes is due to the normalization of market volatility compared with the record figures caused by the pandemic-related volatility a year earlier as well as a decline in the market share of trading in Swiss equities.
Some of the trading activities in Swiss equities moved to trading platforms in the UK from February because of the mutual recognition of the equivalence of market regulation between Switzerland and the UK. Before then, SIX’s market share was almost 100%.
Crypto Products
As of January 1, 2021, SIX bundled its securities business on a cross-regional basis in its two domestic markets of Switzerland and Spain. The Listing and Trading divisions are now part of the Markets business unit, and the post-trade business has been assigned to the Securities Services business unit.
The Markets business unit contributed 84.2 million francs to business unit profit.
In the first half of the year, 40 exchange-traded products with cryptocurrencies as underlyings were launched on the Swiss stock exchange, including the world's first ETPs to be based on the cryptocurrencies Cardano, Stellar, Polkadot and Solana.
Cryptoproducts with a total value of around 4.8 billion francs have already been traded since the start of the year. This represents a more than fourfold increase compared with the whole of the previous year, the exchange operator said.
Takeover Opportunities Eyed
SIX said that although it expected growth to be to be achieved primarily by organic means, such as in the fields of ESG, digital assets, billing, payments and cash, it was also prepared for inorganic growth, and was constantly analyzing «promising opportunities».
It added that «decisive progress» had been made on integrating BME and that the focus now was on further potential synergies, such as platform consolidation.
