The UK based forex broker FXCM UK registered an impressive performance in its 2020 results to register an impressive $4.9million profit. This is an astonishing turnaround from 2019 where the company registered a loss of $1.2 million. This means an impressive turnaround of almost 520%.
Forex Capital Markets Limited which is regulated by the FCA is wholly owned by Jefferies Financial which is also listed on the New York Stock Exchange. The annual financials of FXCM published with Companies House announced a profit of around $4.9 million as well as a substantial 7.5% reduction in turnover.
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Forex Broker FXCM Posts Astonishing Turnaround in Profit
FXCM’s impressive profit surge came on the back of a complete overhaul and simplification of its revenue model in 2020. In the Companies House filing, the company also stated how this works. FXCM, ‘hedges its clients trade with affiliates and is compensated in return with a straightforward commission based upon a relative contribution to total FXCM group profits’.
Additionally, the company also earns substantial amounts from its white-label offerings, its back-office and trade execution services, FX market prices and several other ancillary services.
FXCM also gained substantially from the market volatility registered in 2020. These pushed trading volumes through the roof. In fact the results posted showed an 11 per cent gain year-on-year for an average of $50 billion in trading volume per month.
A Leaner and Meaner Model For FXCM
It is no wonder that the forex broker FXCM registered such an impressive turnaround in profits for 2020. These were the main result from a huge reduction in administrative expenses which dropped by as much as 36%. The brokerage business alone generated an operating profit of almost $4.4 million.
Client cash held by the broker dropped by around 25% to $14.5million by the end of the year. In its results, FXCM noted that the dip was largely caused by the withdrawals of several high value clients.
FXCM is firmly focused on retaining as well as growing its client base across 2021.
“The company’s objectives for 2021 are to optimize revenues from the current and new businesses while strengthening the FXCM group brand,” the broker said.
“The Company is also re-evaluating how client trade flows are managed, relying less on a smaller number of metrics and more on technologies which provide a holistic view into client trading pattern”, FXCM commented.
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