<p>IG Group (LON: IGG) announced its performance for the third quarter of the <a href=”https://www.financemagnates.com/forex/brokers/ig-group-sees-solid-growth-in-fy22/” target=”_blank” rel=”follow”>financial year 2023</a>, reporting a 7 percent lower revenue at £239.3 million. The overall figure was dragged down by the OTC derivatives revenue, which was 18 percent lower at £179.4 million.
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Lower Market Volatility Pushes down OTC Derivatives Revenue of IG
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The<a href=”https://www.financemagnates.com/tag/ig-group/” target=”_blank” rel=”follow”> London-headquartered group</a> highlighted that lower market volatility between December and February resulted in a lower revenue per client in its OTC business, resulting in an 8 percent drop in active clients. In addition, it highlighted that the US OTC business witnessed “another strong quarter of growth” but did not provide any figures.
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On the other hand, revenue from exchange-traded derivatives jumped 65 percent to £52 million. US-based tastytrade generated £44.9 million in revenue in the quarter, which was 57 percent higher than the previous year and driven by an increase in the interest income. </p><p>
Further, stock trading and investments revenue were 19 percent higher at £7.9 million. Though the client trading activities in this product line decreased to pre-pandemic levels, the number of clients remains steady and higher than the pre-pandemic numbers.
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“Q3 FY23 was a quieter quarter in the market, particularly in December, with lower market <a href=”https://www.financemagnates.com/terms/v/volatility/” class=”terms__main-term” id=”7fd330d9-8855-4c31-9770-cb52b328c117″ target=”_blank”>volatility</a> than in recent periods and in Q3 FY22. The benefit of our diversification strategy is becoming increasingly evident, with our exchange-traded derivatives business posting strong growth in both Europe and the US,” IG stated.
</p><p>Moreover, IG categorizes its revenue streams by portfolio: Core Markets+ and High Potential Markets. While the revenue from the Core Markets+ portfolio went down by 18 percent to £186 million, the High Potential Markets is witnessing a massive demand as revenue increased 60 percent to £56.7 million.
</p><p>IG Will Meet Market Expectations
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Earlier, IG <a href=”https://www.financemagnates.com/forex/ig-sees-10-revenue-jump-in-h1-fy23-extends-share-buyback-program/” target=”_blank” rel=”follow”>reported total revenue of £519.1 million</a> and pre-tax profits of £240.5 million. While the revenue jumped 10 percent year-over-year, the pre-tax profits slightly decreased by 2 percent. On top of that, the platform added 37,500 new clients in the period, which is down from 53,600 new additions in the first half of FY22, thus ending the period with a total of about 312,000 clients.
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“We anticipate FY23 revenue and profit before tax will be in line with current market expectations. Our medium-term revenue and profit margin guidance remains unchanged,” the broker added.
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Meanwhile, IG is aggressively repurchasing its publicly listed stocks from the open market. Initially, it <a href=”https://www.financemagnates.com/forex/brokers/ig-group-launches-150-million-share-buyback-program/” target=”_blank” rel=”follow”>launched a £150 million buyback program</a> but allocated an additional £50 million in January. The group disclosed that it had repurchased 17.4 million shares by 13 March at the cost of £137.4 million.
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This article was written by Arnab Shome at www.financemagnates.com.
