UK’s IG Group ekes out revenue rise from interest income, U.S. trading
(Reuters) – British online trading platform IG Group on Thursday reported a marginal rise in its first-quarter revenue after a big boost from net interest income and strong U.S. trading helped offset a fall in the number of active clients.
Changing market conditions after the pandemic, the ongoing Ukraine war, and the fall of several regional U.S. banks including the Silicon Valley Bank, have impacted numbers of new clients and trading activity.
Trading volumes have also reduced because the disposable income of consumers has been hit by the rising cost-of-living and interest rates amid high inflation.
Total active users across all markets and products in the first quarter ended Aug. 31 fell to 267,000 compared to 279,300 a year earlier, IG Group said in a trading update on Thursday.
However, the company’s net interest income on client balances was boosted by rising interest rates and stability in the amount of cash maintained by clients in their accounts.
Net interest income during the quarter was 34.4 million pounds compared to 7.1 million pounds a year earlier.
The total client money balance of 4.1 billion pounds remained stable from the year-end balance.
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Shares in the company rose 1.3% to 677 pence at 0741 GMT.
Tastytrade, acquired by IG Group in 2021 in an effort to expand into the U.S., grew sales by 48% to $60 million during the quarter.
IG Group posted total revenue of 242.9 million pounds ($303.5 million) for the reported period, compared with 241.8 million pounds a year earlier.
($1 = 0.8004 pounds) (This story has been corrected to say that the total active users a year earlier was 279,300, not 279,3000, in paragraph 4)
(Reporting by Khushi Mandowara in Bengaluru; Editing by Rashmi Aich, Elaine Hardcastle)
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