Swissquote, an online financial services provider based in Switzerland, has announced its financial results for 2022. The company recorded a net revenue of CHF 408 million and a pre-tax profit of CHF 186.4 million, which were consistent with the previously announced tentative figures. However, compared to the previous year’s peak, these figures fell by 13.6% and 16.5%, respectively.
Despite the decline in revenue, the pre-tax profit only decreased marginally to 45.7% from 47.3%. The net profits also declined by 18.6% to CHF 157.4 million, resulting in a profit margin of 38.6%, down from 40.9%.
Client numbers
The company’s announcement on Thursday highlighted that both net revenues and pre-tax profit reached the second-highest levels in history, which reflected its strong customer base and product mix in a challenging market environment. Swissquote onboarded 51,099 new clients in 2022, of which about 8,000 were inorganic. The total number of traders on the platform also increased by 10.5% to 538,946 by the end of the year, with an average deposit of almost CHF 100,000 per client.
While client assets on Swissquote decreased by 6.6% to CHF 52.2 billion, the trading platform received net new monies of CHF 7.7 billion, CHF 1.7 billion of which were inorganic.
Trading Income
Swissquote faced challenges in 2022, which impacted most of its revenue streams. There was a 7.6% decrease in net income from fees and commissions, and a 14.3% drop in net eForex income due to lower trading volumes. The net income from crypto assets declined drastically by 72.9% to CHF 27.7 million.
The platform’s net trading income reduced by 23.8% due to lower turnover in foreign currency asset classes. However, there was a 242.6% increase in net interest income, which benefited from rising interest rates across major currencies. Swissquote highlighted that their diversified revenue streams allowed them to benefit specifically from the change in short-term interest rates.
Additionally, effective cost management resulted in a 13.2% decrease in operating expenses to CHF 215 million. Despite this, the company increased its headcount significantly, with most of the new hires in tech-related roles.
Outlook
Despite the challenging market conditions in 2022, Swissquote remains optimistic about its performance in the current year. The company has set ambitious targets, aiming for a 21% increase in net revenue to CHF 495 million and a 23% gain in pre-tax profit to CHF 230 million for 2023.
In addition, the company has confirmed its medium-term target of achieving a pre-tax profit of CHF 350 million by 2025.
Swissquote obtained a Cyprus Investment Firm (CIF) license last year to strengthen its presence in the European Economic Area (EEA). The company also launched a cryptocurrency exchange in the previous year.
