Online banking and trading services provider Swissquote Bank has announced a dip in its profit for the first half of 2019. The company registered CHF 22 million ($22.47 million) in profit against CHF 25.7 million registered in the same period last year. The bank also revealed a steep decline in its cryptocurrency business which impacted its net fee and commission income.
In its financial statement published yesterday, the Gland, Switzerland-based bank revealed some of the major milestones it had achieved in the first half of the year. They include the acquisition of Luxemburg-based Internaxx Bank as well as receiving a Capital Market Service License to operate in Singapore. Despite these achievements, the company’s profits took a hit as its crypto and forex units dipped.
The company stated, “Owing to a significant year-on-year decline in cryptocurrency business (-CHF 4.8 million) as well as the previously communicated weak start to trading in the first few months of 2019, net fee & commission income was 17.9 percent lower at CHF 45.6 million (CHF 55.6 million).”
Nonetheless, Swissquote registered a 12.5% increase in net electronic foreign exchange income. This was attributed to an increase in assets held in eForex accounts and generally improved margins. The total number of accounts held at the bank also increased by over 17,000 to hit a new record at 339,172 accounts. The bank forecasts a 5-10% growth in net revenues for the year 2019.
The bank’s crypto venture has proven to be lucrative. In its first half of 2018, the bank boosted its profits by 44%, with its crypto business being one of its best performing units. Swissquote introduced crypto trading in December 2017 at a time when many financial institutions refrained from associating with the crypto industry. Its first-mover advantage enabled it to establish itself ahead of its rivals and to spark a wave of banks offering crypto services in Europe.
Earlier this year, the bank announced that it would begin offering crypto custody services. The crypto custody industry has become highly lucrative, with financial institutions seeking to venture into the industry. Swissquote partnered with fellow Swiss fintech startup Crypto Storage AG on the venture which will initially offer support for SegWitCoin (BTC) and Ethereum.
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