Saxo Bank announces H1 2019 results

The Saxo Bank Group (“The Group”) reported a negative net profit of DKK 139 million for the first half of 2019, compared to a positive net profit in the first half of 2018 of DKK 153 million.

Operating income for the Group reached DKK 1.1 billion, a decrease of 26 percent compared to the first half of 2018. The total capital ratio for the Group was 31.9 percent as of 30 June 2019 compared to 35.0 percent at the end of 2018.

The negative net profit reflects primarily the headwind from external factors as volatility across most financial markets - particularly FX markets that account for a large part of the Group’s earnings - continued to be close to an all-time low during the first half of 2019.

To remain the obvious choice for clients, the Group has also chosen to invest in lowering prices significantly across asset-classes which has a negative impact on short-term financial performance but is expected to further fuel future growth.

In addition, Saxo Bank continued its high investments to execute on the Group’s ambitious strategic priorities of fully digitising the entire value chain, creating a world class sales and service organisation and industrialising the wholesale offering.

The key to success in this market environment is scale and an optimal digital client experience.

While the financial result is lower than anticipated, several leading business indicators have continued a favourable development. In the first half of 2019, the direct client base grew with 17,497 new trading and investing clients, an increase of 66 percent compared to the same period last year. With 19 new wholesale partners onboarded, the onboarding and pipeline of wholesale partners also reached new heights during the first half of 2019. Clients´ collateral deposits continued to increase to DKK 131 billion from DKK 113 billion as of 31 December 2018 representing an increase of 16 percent.

A further very significant step in achieving scale has been taken with the acquisition of BinckBank which was completed 7 August 2019 following strong shareholder acceptance as well as the necessary regulatory approvals, allowing Saxo Bank to welcome BinckBank in the Saxo Group adding 640,000 clients and approximately DKK 214 billion in client assets, marking a significant milestone in the history of Saxo Bank.

In aggregate, CAPEX investments increased to DKK 290 million in the first half of 2019, representing an increase of DKK 93 million compared to the first half of 2018 with most of it supporting the ongoing digitisation and investments in compliance and Regtech. In addition to CAPEX investments, the Group has during the first half of 2019 invested heavily in the implementation of wholesale partners such as Banca Generali, building the foundation for the Group’s plans for the Greater China area as well as preparing and planning the integration of BinckBank.

H1 2019 key figures at a glance (H1 2018)

• Operating income: DKK 1,109.8 million (DKK 1,506.4 million H1 2018)
• EBITDA: DKK 57.1 million (DKK 397.9 million H1 2018)
• Adjusted EBITDA: DKK 125.1 million (DKK 431.2 million H1 2018)
• Profit before tax: DKK (163.6) million (DKK 209.4 million H1 2018)
• Net profit: DKK (139.0) million (DKK 153.3 million H1 2018)
• Clients' collateral deposits: DKK 130.8 billion (DKK 112.6 billion at the end of 2018)
• Total equity: DKK 5,387 million (DKK 5,552 million at the end of 2018)
• Total capital ratio: 31.9% (35.0% at the end of 2018)

Commenting on the results, Kim Fournais, CEO and founder of Saxo Bank, said:

• The result is slightly lower than anticipated, primarily due to macro trends in the investment industry in general, which is facing headwinds with very low volatility and continued margin compression.
• Despite headwinds in the industry, we remain fully committed to executing on our ambitious long-term strategy including record high investments in technology and our people. The key to success in this environment is scale and an optimal digital client experience.
• A huge step in achieving scale has been done with the BinckBank acquisition, which marks a significant milestone in the history of Saxo Bank. We are very proud to welcome BinckBank to the now much larger Saxo Group adding 640,000 clients as well as approximately DKK 214 billion in client assets.
• The acquisition will allow us to further step up investments in the digital SaxoExperience to cater for our clients in the best possible way, which is key to long-term growth and profitability.
• In addition, we have seen a positive development in a number of leading indicators with a record intake of new clients in the first half of 2019, new highs in the onboarding and pipeline of high-profile wholesale partners as well as a significant increase in AUM.

The full report is available here: https://www.home.saxo/about-us/investor-relations