Copenhagen based Retail FX and CFDs broker Saxo Bank has released its first half 2024 results, indicating a slight rise in Revenues and a return to profitability after the company posted its first semi-annual loss in several years during 2H-2023.
On the top line, Saxo Bank reported Revenues of DKK 2,318 million (USD $345 million) for the first six months of 2024, up by 4% from both H1 and H2 2023’s near-identical result of $333 million. Saxo’s Net Profit of DKK 464 million ($69 million) for H1 2024 was more than the company earned in all of 2023.
The Revenue increase at Saxo Bank during H1-2024 can be attributed mainly to increased Interest Income, in what has been a high interest rate environment. Saxo’s Net Interest Income in H1-2024 of DKK 1,140 million was 49% of the company’s total Revenue, up 19% from the first half of 2023. Fee and Commission Revenue from the company’s core brokering business of DKK 675 million was actually down by 2% from last year’s first half (DKK 689 million).
The results come during a tumultuous time at the company, with Saxo Bank hiring investment bank Goldman Sachs over the summer to pursue an IPO or sale of the company, in order to provide liquidity to the company’s two main outside shareholders, China’s Geely Group and Finland’s Mandatum Group, both of which have indicated their desire to exit their ownership positions in the company. Saxo Bank attempted an IPO (via SPAC merger) in 2022, which was ultimately abandoned.
During 2024, the Saxo Bank said it rolled out a new competitive pricing structure that lowers costs for clients as well as improvements to the client experience, leading to a record number of clients and client assets, with over 1.2 million end clients and EUR 109 billion in client assets as of 30 June 2024.
The company said that volatility across financial markets has been low in the first half of 2024, resulting in lower trading and investing activity, while higher interest rates and positive inflow of client funding impacted the company’s financial performance positively.
Despite the short-term negative impact of reduced pricing, total income increased slightly to EUR 311 million in the first half of 2024 and was diversified almost equally between the business areas – with trader clients accounting for 34%, investor clients 34%, and institutional 32%.
Moreover, S&P upgraded Saxo Bank’s rating to A- from BBB during the first half of the year in a testament to the Saxo Bank Group’s strong financial position.
To increase focus, strengthen compliance, reduce risk, and enhance operational efficiency, the Saxo Bank Group initiated a restructuring of its distribution model in the Asia-Pacific region, considering the strategic opportunities for its offices in Hong Kong, Japan, and Australia, while the office in Shanghai is in the process of being closed. This has led to recognition of restructuring costs of EUR 6 million in the first half of 2024.
The Saxo Bank Group expects the full year’s adjusted net profit to be maintained in line with the previously guided range of EUR 114 – 134 million.
Commenting on the results, Kim Fournais, CEO and Founder of Saxo Bank, said:
“The positive momentum we’ve 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 more than EUR 109.38 billion in assets. This is a result of our relentless focus on enhancing our investment platforms, products, and services, and offering very competitive pricing that empowers our growing client base to make more of their money.
“It’s also encouraging to see our clients increasingly recognising 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, making it easier and more attractive for investors to build healthy and profitable portfolios and manage their risks. Diversification is truly the “only free lunch” in investing – and we are here to provide the tools, product range, and insights to help our clients navigate their portfolios with confidence.”
