Saxo Bank Reports Revenue Increase, Shutters China Office

Saxo Bank H1 2024 results show a revenue increase to $345M, a profitability return, and the closure of the China office.

Key Points:

• Revenue Increase: Saxo Bank‘s revenues for H1 2024 rose to USD 345 million, a 4% increase from both halves of 2023.
• Profitability Restored: The bank achieved a net profit of USD 69 million for the first half of 2024, surpassing the total net profit for all 2023.
• China Office Closure: Saxo Bank is closing its Shanghai office as part of a broader restructuring plan.

Saxo Bank, the Copenhagen-based retail forex and CFDs broker, has announced its financial results for the first half 2024. The results reveal a modest rise in revenues and a return to profitability following a challenging second half of 2023.

For the first six months of 2024, Saxo Bank reported revenues of DKK 2,318 million (USD 345 million), reflecting a 4% increase from the first and second halves of 2023, where revenues were nearly identical at USD 333 million. The bank’s net profit for H1 2024 surged to DKK 464 million (USD 69 million), surpassing the total net profit for the entire year of 2023.

Saxo Bank saw its revenue boost in H1 2024 primarily due to a significant increase in interest income driven by the prevailing high interest rate environment. The bank’s net interest income reached DKK 1,140 million, accounting for 49% of total revenue, marking a 19% increase compared to the first half of 2023. However, fee and commission revenue from the bank’s core brokering activities declined by 2% to DKK 675 million, compared to DKK 689 million in the previous year’s first half.

Saxo Bank Reports Revenue Increase, Shutters China Office

Amidst these financial results, Saxo Bank has been navigating a period of strategic change. The company has engaged Goldman Sachs to explore options for an initial public offering (IPO) or potential sale to provide liquidity to its major shareholders, China’s Geely Group and Finland’s Mandatum Group, who are looking to exit their positions. Saxo Bank previously attempted an IPO through a SPAC merger in 2022, but it ultimately scrapped the plans.

Saxo Bank introduced a new pricing structure to enhance its competitive edge, reduce client costs, and improve the overall client experience. This move has led to a record number of clients and client assets, with over 1.2 million and EUR 109 billion in client assets as of June 30, 2024.

Despite a low volatility environment across financial markets leading to reduced trading activity, Saxo Bank has benefited from higher interest rates and a positive influx of client funding, which supported its strong financial performance. The company reported a slight increase in total income to EUR 311 million for the first half of 2024, with nearly equal revenue distribution among trader clients (34%), investor clients (34%), and institutional clients (32%).

In a significant operational shift, Saxo Bank has decided to close its Shanghai office as part of a broader restructuring effort to increase focus, improve compliance, and reduce operational risks. This restructuring, which includes a review of offices in Hong Kong, Japan, and Australia, cost EUR 6 million in the first half of 2024.

Saxo Bank also received a credit rating upgrade from S&P, moving from BBB to A-, underscoring its strong financial position.

CEO Insights:

Kim Fournais, CEO and Founder of Saxo Bank, commented on the results:

“The positive momentum we’ve experienced in the first half of the year is a strong indicator that our strategy is resonating with our clients. More than 1.2 million clients now trust Saxo, which has more than EUR 109.38 billion in assets. This results from our relentless focus on enhancing our investment platforms, products, and services and offering very competitive pricing that empowers our growing client base to make more of their money.

“It’s also encouraging to see our clients increasingly recognizing the value of diversifying their portfolios across different markets and asset classes. In these uncertain times, we remain fully focused on facilitating diversification across asset classes, making it easier and more attractive for investors to build healthy and profitable portfolios and manage their risks. Diversification is truly the ‘only free lunch’ in investing – and we are here to provide the tools, product range, and insights to help our clients confidently navigate their portfolios.”

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