Polish FX brokerage XTB is proceeding with its plans to exit the Turkish market and will be withdrawing its registration with the CMB, according to a corporate statement.
XTB stated earlier in November 2017 that it may suspend its plans to cease operations in Turkey until the end of the first half of 2018, as the listed company expected Turkey’s authorities to retreat from a number of limits to the forex business that were introduced earlier this year.
But after the Turkish regulators had given no indication of their intention to revise the significant limitations on forex regulations, XTB has decided to put an end to its presence in the country through liquidating its subsidiary X Trade Brokers Menkul Değerler.
Despite gloomy conditions and uncertain prospects for Turkey, XTB is accelerating its expansion plans and setting high targets for international growth, particularly in Latin America, Africa and Asia.
XTB wrote to its shareholders that it plans to use its presence in Belize as a starting point for expanding business in Latin American countries. Thanks to the presence in Belize, the group can offer Latin American customers a region-specific service and adopts its marketing strategies to local conditions.
XTB stated earlier that it expects that the CMB initiative will significantly reduce overall activity in Turkish retail forex trading. It also said that these drastic changes to the regulatory structure have contributed to a considerable decline in the number of customers and consequently to a significant reduction in the activity of XTB Group in Turkey.
XTB’s decision to withdraw from this market was also based on the recent economic and political situation in Turkey which, in the company’s opinion, has also affected the business environment and triggered uncertainty in this market.
XTB explains that due to the recent jump in Turkish lira volatility, the group is not able to precisely estimate the financial cost of its decision, therefore it will be recognized in the future statements.
According to previous information from the XTB website, the decision to shut down its Turkish subsidiary will affect the current financial situation. Specifically, it will require that the value of the shares of its Turkish unit be written off, which equal PLN 9.7 million ($2.55 million).
Furthermore, the company has intended to separately create another write-off of the value of its intangible assets to reflect the shutdown of its brokerage activities license in Turkey. This amounts to approximately PLN 5.6 million ($1.47 million).