Saxo Capital Markets UK profit drops 32% to £7.6M in 2024 despite a 79% surge in new clients driven by aggressive fee cuts.
Saxo Capital Markets UK profit drops 32% to £7.6M in 2024 despite a 79% surge in new clients driven by aggressive fee cuts.
Saxo Capital Markets UK profit drops 32% to £7.6M in 2024 despite a 79% surge in new clients driven by aggressive fee cuts.
Key Points:
Saxo Capital Markets UK Limited, the UK arm of Denmark-based Saxo Bank, reported a 32% drop in annual profit for 2024 despite a sharp rise in new clients, as lower trading fees and muted market volatility weighed on revenues.
The online trading platform posted a profit of £7.6 million for the year ending December 31, 2024, down from £11.2 million in 2023. Profit before tax fell nearly 30% to £10.4 million, reflecting a strategic shift toward customer acquisition through reduced commission rates and the removal of certain account fees.
Trading revenue declined by £3.5 million to £24.4 million, driven by a mix of strategic pricing reductions and a subdued trading environment throughout much of 2024. The company slashed fees on stocks, ETFs, options, and futures while scrapping inactivity charges and minimum custody fees for retail clients, a move that significantly reduced transaction-based income.
“Lower pricing combined with low market volatility throughout most of 2024 resulted in a drop in the trading revenue for the company of £3.7m,” the company said in its annual filing.
Fee and commission income fell to £15.2 million from £19.6 million, while net income from client deposits rose to £10.2 million amid higher interest rates.
The pricing strategy, however, paid off in terms of growth. Saxo UK added 3,600 new trading clients in 2024 a 79% increase from the previous year’s 2,000. Total client assets under management (AUM) rose 14% to £2.63 billion, up from £2.30 billion.
Administrative expenses remained stable at £16.0 million, indicating that cost control measures helped mitigate some of the revenue shortfall. The company’s cost-to-income ratio rose to 66%, up from 57% a year earlier, underscoring the margin pressure from the competitive fee environment.
Despite the earnings drop, Saxo UK maintained a solid capital base with Tier 1 capital of £54.4 million, comfortably above the £18 million regulatory requirement. Shareholders’ equity fell to £62.4 million from £66.1 million, mainly due to an £11.3 million dividend payment, up from £10 million in 2023.
Return on equity before tax dropped to 17% from 22%, reflecting weaker profitability.
Saxo UK operates in a fiercely competitive online brokerage market, where fee compression and rising client expectations continue to challenge profitability.
“The UK market remains highly price-sensitive, and uncertain or unfavorable macroeconomic or geopolitical conditions can impact demand,” the company noted in its report.
Despite the challenges, management sounded an optimistic tone for 2025, citing a pickup in trading activity in early Q1 driven by renewed market volatility linked to global economic and political developments.
In a bid to capture retail investor demand, Saxo UK launched a new Flexible ISA in April 2025 after a sixfold surge in interest for its Stocks and Shares ISA earlier in the year.
In March, Saxo Bank UK’s longtime Chairman Richard Balarkas stepped down after a decade of leadership, marking a significant transition as the company adapts to shifting market dynamics and evolving investor preferences.
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