Saxo Bank has just released its 1st half interim results for 2012, with headline numbers of an operating income 1.416 billon DKK (237 million USD) and net income of 43.5 million DKK (7.31 million USD). These figures compare to a 1.769 billion DKK (297 million USD) and 345.7 million DKK (58.1 million USD) in the same period last year. On explaining to nearly 20% drop in operating income and more than 85% drop in net income, Saxo Bank stated that the “The first six months of 2012 was an unusual period for the financial markets, influencing trading income in Saxo Bank. The macro environment was characterised by continued low growth and uncertainty driven by the EU debt crisis. The potential risk of a breakdown of the Euro put a damper on investors’ market activity.”
Saxo Bank also claimed that central bank intervention towards the Swiss franc and Japanese yen was effecting client behavior and led to a decrease in trading volumes. The drop in trading volumes occurred even as client deposits rose by nearly 30% to 30.223 billion DKK from 23.284 billion DKK for the same period last year.
Saxo Bank also reported that “On 2 April 2012 the Group acquired 100% of the shares in Lembex Trading and Marketing Services Ltd. in Israel and Lembex Global Investments Ltd. in Malta. The acquisitions are a strategic step as they give access to the MT4 segment.” The deal was valued at 22.4 million DKK, of which 19.1 million DKK was measured as goodwill. The report of this deal was first mentioned in our report of Saxo’s 2011 earnings report. (With goodwill being valued at 85% of the total cost of the transaction, it appears that the owners of Lembex received a higher than average price for their company. This would mark the second time this team has been successful in gaining a premium for their brokerage activities. The same team sold Finexo to Markets.com/Safecap in 2010 for what has been considered an aggressive valuation.)
Saxo Bank also announced that in May, the broker reduced margins in forex by increasing its half margin threshold from 50,000 EUR to 300,000 EUR. They also said that margins were reduced in July for CFDs.
Another new development was the addition of an FX Open Orders module that was launched in June for the TradingFloor.com website. The module provides a snapshot of Saxo Bank clients’ aggregated FX open orders on ten major currency pairs.
Saxo Bank is now present in 21 countries, and they anticipate further geographical expansion with the launch of an office in Warsaw, in September. Saxo Bank also launched a Chinese edition of Forextrading.com through its wholly-owned subsidiary, FT World. Also, in May Saxo Bank launched a branded MT4 offering n the UK through FT World. The SaxoMT4 offering is “designed to provide clients who prefer to trade under the Saxo Bank brand with the same mt4 trading capabilities and simplified accounts provided through Forextrading.com.”