Swiss bank Dukascopy has published its annual results for 2017. The company posted a tiny profit of CHF 117,000 ($117,000) due to a slightly lower operating income and expenses that were higher year-on-year.
Dukascopy Bank’s total operating income declined by 12 percent to CHF 29.1 million ($29 million) despite trading volumes that amounted to CHF 657 billion, a figure which was flat year-on-year. The company reported a 14 percent increase in the number of active trading accounts, but total client deposits declined by a bit over 10 percent to CHF 105.5 million.
Total operating expenses rose by five percent to CHF 30.5 million, with an operating loss of CHF 2.4 million being offset by the release of Dukascopy Bank’s reserves for general banking risks that amounted to CHF 2.8 million. The figures are in line with the slowdown which was marked in the first half of 2017.
Big White Label Partner Withdrawal
The total amount of client deposits was negatively impacted by the withdrawal of a big white label partner of Dukascopy. The firm hasn’t disclosed the name, but also pointed out that the massive increase in Bitcoin trading might have played a role in the overall decline in money available for trading classical financial instruments.
While the European business of Dukascopy Bank was stable and financially balanced, Japanese clients have doubled their deposits with the Tokyo-based subsidiary of the Swiss company. Dukascopy Japan also doubled its operating income and cut in half its operating loss to CHF 485,000.
Some Positive Prospects Ahead
Despite the implementation of the new regulatory framework for clients in the European Union, the Swiss banking license of Dukascopy Bank could prove to be a positive for the company. While brokers with a European license will be confined to the lower leverage requirements, customers of Dukascopy who are willing to use higher leverage ratios will be able to open accounts with the Swiss subsidiary of the firm.
Granted, the minimum deposit requirements will be higher, but the Swiss regulatory framework will be providing better protection for retail investors than that of any EU country. Any retail clients in the EU that are working with an EU-regulated broker will have to reclassify as professional investors and hence lose insurance on their deposits. At the same time, they will also have to part with the no-negative balance protection, which also applies to Swiss regulations.