Brokers Continue to Report Higher Revenues Amid Covid-19 Volatility

The Financial Commission / Media posts / Brokers Continue to Report Higher Revenues Amid Covid-19 Volatility

We previously indicated that UK-based broker Plus500 Ltd (LON:PLUS) has revised revenue expectations for 2020 with a significant uptick in trading volumes and customer activity, which is positively driving “all financial and operational KPIs”. Today we have learned that IG Group Holdings plc (LON:IGG), another UK-registered broker has also updated their revenue figures for the three months to February 29, 2020 (“Q3 FY20”).

Similar to Plus500, IG Group has reported “strong business performance during the third quarter supported by a significant increase in active clients and reflecting increased client trading activity…”  The broker also noted that activity was especially high “in the last week of February when financial market volatility was exceptionally high.”

As a result, revenue for IG Group was 29% higher in Q3 FY20 than in the same period in the prior year, at £139.8 million. This is also the broker’s strongest performing quarter since ESMA product intervention measures came into place in August 2018. The broker also indicated that the number of serviced customers last quarter grew by 21% as compared to the same previous in the previous year, with over 101,000 customers trading with the firm.

The broker also reported a significant increase in institutional business, with over 40% growth in active clients, while the firm’s US operation, IG US saw 4,000 active clients in the reported period.

We expect other brokers to indicate similar increases in activity, trading and customer touch-points, but it remains to be seen how others have fared in revenue capture during the large market swings, as well as how effective disaster recovery and telecommuting operations have been in ensuring continuity of business for FX brokers worldwide.

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