Smaller but still substantial annual XTB profit

The largest Polish Forex broker 10.03.2020 consolidated financial report for 2019. It shows that X-Trade Brokers (XTB) had PLN 239,3 million of operating profit and PLN 57,7 million of net profit in 2019. This is a smaller income than in the previous year, but XTB has more and more active clients.

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The operating profit for 2019 in the amount of PLN 57,7 million net may be impressive, but it is smaller when compared to last year's result, which was almost PLN 44 million net higher. What is the cause of the drop in profit? For the first time in three years, XTB's operating revenues fell. This is an obvious result of the ESMA recommendation, which "scared" some investors to brokers from outside the European Union, offering greater financial leverage.

Lower profit, more customers

Although XTB spends more on marketing (as much as PLN 4,4 million more than in 2018), this translates into acquiring more customers. In 2019, XTB managed to attract almost 37 thousand. new customers. This is a great result, which beat last year's achievement by as much as 77 percent. And these are not "empty souls", because the indicator, which is even more important from the point of view of revenues, is also growing - there are also more active clients than in 2018. Last year, there were 26,5 thousand of them. i.e. 25 percent more than in the previous 12 months. The total number of new accounts increased to 90 thousand. from 40 thousand, which gives as much as 80 percent. year on year growth. In this respect, 2020 promises to be equally good - in January this year XTB has opened a record number of new contracts (4480 accounts).

However, revenues decreased by as much as PLN 49 million. They amounted to PLN 239,3 million, while a year ago it was PLN 288,3 million. Revenues had a key impact on lower net profit, which eventually reached PLN 57,7 million net (in 2018 it was PLN 101,5 million).

Industry consolidation good for XTB

“The regulatory changes on the European market initiated by ESMA's product intervention are changing the face of the CFD industry. This created both opportunities and threats for XTB. On the one hand, there is a visible decline in the volume of trading with European brokers, including XTB. On the other hand, the Management Board of XTB is convinced of the vitality of the business in the long term. The wave of consolidation is passing through the market in small steps, which should allow XTB to consolidate its strong position on the European market. Small local brokers that are unable to withstand regulatory pressure and stiff competition from larger international brokers such as XTB are gradually disappearing from the market. As a consequence, large brokers have a noticeable increase in the customer base " - notes the President of the Management Board of XTB, Omar Arnaout.

The president also points out that customer acquisition by XTB is constantly accelerating. In the last quarter of 2019, the broker had the most new clients in its history - 10,4 thousand. while in the fourth quarter of 2018 it was 5,7 thousand. new investment accounts. According to the management board, this dynamics is to be positive all the time.

"In 2019, XTB continued the implementation of the optimized sales and marketing strategy, which resulted, among others, in for nearly 80 percent an increase in the number of new clients compared to 2018. Additionally, XTB has successively introduced new products to its offer, such as CFD instruments based on sector indices, and at the same time the offer of shares and ETFs was expanded with new instruments desired by clients. We have provided investors with access to nearly 4 financial instruments from around the world " - emphasizes the president of XTB.