Saxo Bank realised a net profit of 508 million Danish krone (DKK) ($111 million) in H1 2024, a 35% increase when compared to the same period last year, adjusted for restructuring costs of DKK 44 million.
While the first six months of 2024 “have been a challenging environment”, Saxo’s interim report for H1 shows the inflow of new clients has led to a record of more than 1.2 million on its books.
Saxo Founder and CEO Kim Fournais says the positive momentum the company has experienced in the first half of the year is a strong indicator that its strategy is resonating with clients.
“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,” the CEO says.
’It is 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, and making it easier 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.”
All the while, the global banking group reports that positive developments within the global equity markets contributed to all-time high client assets of DKK 816 billion as of 30 June 2024.
Saxo expects adjusted net profit to be maintained in the range of DKK 850 million to DKK 1 billion despite the short-term effects from the new global pricing and given market conditions for 2024 remain uncertain with regards to volatility, inflation, and changes to central bank statements on financial markets.
Total income increased slightly to DKK 2.318 billion in H1 2024, compared to DKK 2.242 billion in the previous corresponding period. This was diversified almost equally between Saxo’s business areas with trader clients accounting for 34%, investor clients 34% and Saxo Institutional 32%.
The increase in total income was driven by the investor and Saxo Institutional business areas that benefited the most from the increase in interest income and the positive development within global equity markets.
“In the first six months of 2024, traders experienced a decrease in total income mainly attributable to reduced client activity across margin products (CFDs and FX products) following the increase in interest rates and the low market volatility,” the interim report notes.
H1 2024 has been characterised by a continued uncertain macro environment, which has lowered the trading and investment activity among Saxo’s clients. However, the higher interest rate levels and positive client funding from the growing client base have resulted in higher net interest income from the liquidity and bond portfolios, the interim report says.
The three major shareholders of Saxo Bank recently appointed Goldman Sachs financial advisor and initiated a review of its strategic opportunities.
To “increase focus, strengthen compliance, reduce risk, and enhance operational efficiency”, Saxo is restructuring its distribution model in the Asia-Pacific region, looking into strategic opportunities for the offices in Hong Kong, Japan, and Australia, while the office in China is in the process of being closed.
This has led to recognition of restructuring costs of DKK 44 million in the first half of 2024.
“Our strategic focus remains unchanged with a continued emphasis on growing our client and client asset base, and on enhancing the product and platform offering to the benefit of our clients as well as focusing on core markets,” Saxo notes in its interim report.
“The focus on core business and markets has led to the decision to restructure our distribution model in the APAC region, looking into strategic opportunities for the offices in Hong Kong, Japan and Australia, while the office in China is in the process of being closed.
“This has resulted in the recognition of restructuring costs of DKK 44 million in the first half of 2024 and hence adjusted net profit ended at DKK 508 million.”
Following the acquisition of BinckBank in 2019, the final step of the integration was completed with a merger between Saxo Bank and BinckBank. Consequently, BinckBank’s three offices in the Netherlands, Belgium and France are now branches operating under Saxo Bank and under the Danish banking license.
Write to Adam Orlando at Mining.com.au
Images: Saxo
