17th Mar 2015 07:52
LONDON (Alliance News) - IG Group Holdings PLC Tuesday said the Swiss National Bank's surprise move to remove the ceiling for the Swiss franc against the euro caused a drop in its third-quarter net trading revenue, and warned that the majority of clients that owe it GBP18.4 million over the resulting jump in the franc may not be able to clear their debt.
In a statement, the derivatives trading platform provider said that net trading revenue fell to GBP91.8 million in the three months ended February 28, compared with GBP96.7 million in the corresponding period last year.
"Clients were presented with a range of trading opportunities throughout the period. An unseasonably strong December was followed by good levels of financial market and client activity in January, before markets quietened a little from the middle of February," IG said in a statement.
The SNB's removal of the long-standing ceiling against the euro in mid-January caused a sharp rise in the value of the Swiss franc, which together with the drying up of liquidity caught out several forex brokers and trading platforms around the world. The move resulted in client debts of GBP18.4 million, according to IG Group, which expects it will have to cover the majority of the losses.
"Although half of the debtor accounts have now been settled, this relates to only a small proportion of the original GBP18.4 million; the majority of remaining debtors may not be in a financial position to clear their debt in full," IG said on Tuesday.
Nevertheless, IG said the third-quarter performance, as well as a "good start" to the final quarter positions it well for the full year.
By Samuel Agini; [email protected]; @samuelagini
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