Hello and welcome to the flatexDEGIRO analyst call for H1 2025 results. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on the telephone keypad. Now, I will hand over the conference to the speakers: Oliver Behrens, CEO; Dr. Benon Janos, CFO; and Achim Schreck, Head of Investor Relations. Achim, please go ahead.
Thank you and good morning, everyone. Many thanks for dialing in and welcome to our analyst call relating to our Q2 results, which we published yesterday evening post-market close. My name is Achim Schreck and I'm heading the Investor Relations team here at flatexDEGIRO, and with me I have today our CEO, Oliver Behrens, as well as our CFO, Dr. Benon Janos, who will lead us through the presentation today. We also have in the room with us today Christiane Strubel, our Chief HR Officer, Dr. Thomas Lindner, our Global Head of Finance, as well as my IR colleague, Laura Hecker. As usual, we would like to provide a short run-through of the presentation before we open up for your questions. Without any further ado, I'm very pleased to hand over now to Oliver. Please go ahead, the floor is yours.
Thank you, Achim. Good morning, everyone, and welcome to our analyst call for our preliminary Q2 and H1 results. Benon will run you through the details of our performance in the second quarter in a moment. I would just like to highlight a few key points. We are obviously well on track. We have achieved a record half-year, both in regard to our top line as well as our bottom line. While external factors have helped this development, namely the higher market volatility, you also have to be able, as a platform and as a team, to capture these opportunities, which I believe we have done very well, particularly during the turbulent days of April. I would therefore also like to take the opportunity to thank all colleagues within flatexDEGIRO who have contributed greatly to this strong performance.
The strong first half also allowed us to raise our full-year guidance significantly, aiming for more than EUR 500 million of revenues and a 15%- 25% increase in net income. Despite some headwind from the overall interest rate environment and despite the fact that the strategic growth initiatives are currently implemented, we have not yet had a measurable impact over the past six months yet. We have also seen a number of important changes to the management team and the Supervisory Board of flatexDEGIRO. I will elaborate on this shortly. Also, on our current status when it comes to crypto and securities lending. Let me start with two high-level observations when it comes to our operating performance. On the trading side, volatility has been a substantial driver of growth.
It spiked at the beginning of the second quarter, reaching levels that were only surpassed at the beginning of COVID. That volatility did not only lift the number of trades, but also the average commission per trade due to a higher share of U.S. trading. It probably even created some tailwind for our interest income due to high cash inflows at the time, with a more moderate investment rate of retail investors. As much as we enjoyed the additional boost in the first half-year, it is prudent to not project such effects into the future, which we have not done for the second half of our full-year guidance. It is also part of prudent management to not get carried away in good times, but to stay focused on the things you can control and we can control. flatexDEGIRO has always been a story about growth and operating leverage.
While we have been able to strongly demonstrate our ability to grow for years, the operational leverage has never been as evident as one could have expected. There have always been reasons why costs went up in one year. Our special expenses had to be accounted for in another. When Benon took office as Group CFO in early 2023, one of his first official acts was to abolish all forms of adjustments in our financial reporting. Yes, unexpected things can happen, and yes, sometimes it is absolutely the right thing to increase costs to achieve a long-term gain. The mindset is and has to be that this is just cost of doing business. In the first half of 2025, the provisions for long-term variable compensation were higher than we originally expected. We did recognize some additional EUR 2 million for some personnel measures.
At the end, we have still been able to deliver, again, the operating leverage one would expect from a platform business like ours. The personnel measures I just mentioned are also related to changes at the top of flatexDEGIRO. Over the last three months, we had three changes at the Management Board or Management Boards, I should say. For the moment, we still have slightly separate management teams in place for flatexDEGIRO AG and flatexDEGIRO Bank AG. In June, Evgeni became our new Chief Risk Officer in the Bank, taking over from Matthias Heinrich. It has been a generational shift. On the same token, Steffen Jentsch left the Management Board of the Bank effective end of this month. He has been responsible for leading the project of addressing all BaFin findings, and given that all major findings have been solved, his position will not be filled again.
Lastly, Stephan Simmang stepped down as CTO, and we used this as an opportunity to bring IT and operations closer together, uniting it under our COO, Jens Möbitz. As we laid out in February already, harmonizing our IT infrastructure is an essential cornerstone for our 2027 growth plans and beyond. This harmonization is not an IT thing only. It is a business requirement implemented by IT. This is why it is so important to have both parts of the organization working hand in glove. I want to use the opportunity to thank Steffen, Stephan, and Matthias for their important contributions they have made to drive the success of flatexDEGIRO over the past years. At the Supervisory Board, three new board members got voted in at the last AGM in June: Hans- Hermann Lotter, Martina Pfeifer, and Sarna Röser.
While Stefan Müller and Bernd Förtsch got re-elected, as indicated, Hans- Hermann Lotter has been elected Chairman of the Supervisory Board. He is also chairing the Nomination and Remuneration Control Committees. The joint Group Risk and Audit Committee is chaired by Martina Pfeifer. I speak for all my colleagues in the management team when I say that we are very much looking forward to working together with this newly assembled board and all of its members. One final remark on governance. As you know, we are in the process of making the legal switch from a German AG to a European SE. Following the approval of the last AGM, things are progressing well, and we expect the change to take effect during the fourth quarter of this year.
I want to close my high-level overview by providing a quick update on some of our key strategic initiatives highlighted in February, starting with crypto trading. We had the initial launch of crypto trading at flatex in Germany in December 2024. In the second quarter, we now also added crypto to the products our DEGIRO customers in Germany can trade. We made progress, but not as much as we wanted. Let me explain. To start with a positive, we have done our homework both on the technical side as well as on the regulatory side. We have done the technical implementation on the DEGIRO system and successfully launched in Germany. We have also received our MiCAR license for the international rollout. However, one of our partners is still waiting for the formal approval of their MiCAR license.
The international rollout, which had been planned for Q2, is therefore delayed, and we have the launch as well as the start of our marketing campaign only after the summer holiday. Economically speaking, the delay is, of course, already reflected in the updated guidance. As planned in this wave, we will go live in the Netherlands, France, Spain, and Austria to then have crypto trading available for around 2/3 of our total customer base. What we have seen so far is promising and generally in line with our original expectations. By the end of the first half-year, the crypto trading volume in Germany alone has already reached approximately EUR 175 million. When it comes to our second important new product launch, securities lending, we are on track for a go live in key markets such as the Netherlands and Spain early Q4.
Securities lending is a valuable enhancement to our product offering, enabling us to generate a higher share of recurring revenues in the future. As mentioned previously, we will start at DEGIRO due to legal restraints in Germany, holding us back on the flatex side. We believe that some 20%-3 0% of DEGIRO's assets under custody will be relevant for securities lending once fully rolled out. We will provide more information on the financial impact of securities lending once we have it up and running and have better visibility on how many customers are opting in and using this opportunity for additional returns. Now, I am pleased to hand over to Benon, who will walk you through our financial performance in the second quarter and the first half of 2025. Thank you for your attention, and now over to you, Benon.
Good morning, everyone, from my side as well, and thank you, Oliver, for your opening remarks. I trust you have already seen our pre-release and the updated guidance we published last week. I'm now pleased to walk you through our financial performance in the quarter in some more detail over the next couple of minutes. Let me quickly remind everyone on the commercial performance in the second quarter as published already with our monthly KPIs. Gross customer additions amounted to approximately 103,000, an increase of 22% year on year. Following normal seasonal patterns, the first quarter is normally the strongest. This year, it was exceptionally strong due to heightened market volatility. This additional volatility peaked at the beginning of April when the U.S. presented their plans to introduce and significantly increase global tariffs.
After a busy April, we observed a normalization in activity in May and June, alongside the typical seasonal slowdown heading into the summer months. This is driven, as usual, by a lot of public holidays and extended weekends. The same is obviously true for trading, and thus the number of settled transactions, which reached 17.9 million in the second quarter, an 18% increase over last year, but a bit lower compared to the first quarter of 2025. We expect this normalization to also continue over the coming months. Assets under custody again reached a new record with more than EUR 83 billion, strongly growing 37% year on year and 10% quarter on quarter. Splitting the assets under custody into securities and cash, you see a relatively uniform development. Securities under custody grew 36% year-over-year and 10% quarter-over-quarter to now EUR 78.4 billion.
At the same time, cash under custody grew by 43% and also 10% respectively. For the first time in our corporate history, we have now surpassed the EUR 5 billion mark as of June 2025. To some extent, the growth in cash under custody reflects the heightened market activity, and frankly, we did not anticipate such a strong increase in cash levels when we did our financial planning towards the end of 2024. However, it is important to note that we do not expect these levels of volatility and increases to remain throughout the rest of the year. Let me also point out that from our perspective, these increases over the last few months also reflect the high level of trust customers put in us. As demonstrated during the busy first weeks of April, when some peers had difficulties handling the steep increase in trading volumes, our platforms performed reliably.
We instantly saw a very positive customer reaction to this, and we believe it will also be good to our reputation in the market, both medium and long term. The increase of both securities and cash under custody has been supported by strong inflows onto our platform. Let us have a closer look at the development of our net cash inflows on the next slide. As you can see here, our customers continue to strongly deploy cash onto our platform, resulting in positive net cash inflows of EUR 2.5 billion in the second quarter. This represents a significant increase of over 70% on a year-over-year basis. For the first half-year, we recorded net cash inflows of EUR 5.6 billion compared to EUR 3.2 billion in H1 of 2024.
In April, we saw the second highest monthly net cash inflows in our history, surpassed only by the exceptional levels seen in March 2020 when COVID hit the market. With around 80%, a significant portion of these inflows came from our existing customer base, underlining the continued trust and engagement of our customers. It is worth noting that in the first half of 2025, in quotation marks, only around 85% of these net cash inflows were reinvested, compared to a historical average of approximately 95%. Now, as usual, we portray our revenue split in the past quarter on slide 15. In the second quarter, revenues grew 11% year on year. Commission income increased strongly by 28% year on year, which is mostly attributable to a continuously growing customer base and higher commissions per transaction. I'll turn to that in a second.
Despite a significantly lower interest rate environment, interest income remained relatively stable. Interest income only declined by 10% year on year and just 2% sequentially. This was less than what we previously anticipated. Higher amounts of cash under custody and a slightly growing average margin loan book compensated to a large extent for lower interest rate levels from the European Central Bank. That said, as the overall market environment continues to normalize, we anticipate that cash levels will not continue on this exceptionally strong growth path that we have observed in the first six months. We are also mindful of a potential further cut of interest rates by the ECB. Moreover, please note that effective July 1st 2025, we have lowered our margin loan rates at flatex and DEGIRO by approximately 50 basis points on average.
Since July 1st, the average rates are thus in the range of around 5.5%- 5.75%. Turning to the monetization of trades, you can see that we were able to generate an average commission of EUR 4.72 per transaction in the second quarter of 2025, and a 9% year-over-year increase from EUR 4.33 in Q2 of 2024. We have benefited here from higher U.S. trading volumes, an effect that basically started around the U.S. elections in early Q4 of last year. We have also seen a stronger pickup in trading at the flatex side, which is quite positive for us from a mixed perspective. Sequentially, the commission per transaction fell by only 6%. As you well know, but please let me reiterate again, Q1 commissions per trade are generally higher than in the following quarters due to seasonal effects.
For example, the so-called connectivity fees are typically charged in January or February each year. Moving to slide 17, we have portrayed our different cost items and their development over the past quarter. Let me dive a bit deeper into the different drivers for each cost item. Personnel expenses rose from EUR 26 million in Q2 of 2024 to EUR 31 million in Q2 of 2025. The increase in current personnel expenses was due to general wage inflation, but also due to provisions for personnel measures. Without these provisions, current personnel expenses would have been pretty flat year-over-year. Expenses for long-term variable compensation came down versus Q1, in which the strong share price increase had driven up the valuation. Marketing and advertising expenses amounted to EUR 7 million in Q2, down from EUR 12 million in Q1 2025. Marketing expenses are seasonally front-loaded, with Q1 typically seeing the highest spend.
On a year-over-year comparison, marketing expenses were on a comparable level despite our accelerated customer growth and the recent crypto launch in Germany. Our average customer acquisition cost in Q2 of 2025 amounted to EUR 68, down 11% year-over-year from EUR 77 in the second quarter of last year. Other administrative expenses amounted to EUR 12.9 million, decreasing 20% year on year. This is a welcome trend, and the reduction reflects our ongoing commitment to cost management and operational efficiency. We therefore saw a meaningful reduction in costs related to professional services, legal, and consultancy fees, amongst others. Let me reiterate what our full-year ambition is regarding these admin expenses. Last year, admin expenses amounted to EUR 61 million. While this number has been driven by the work last year to comply with regulatory requirements, it is not sustainable going forward.
Our aim is to reduce it by up to EUR 10 million, i.e., bringing it back to slightly above EUR 50 million. If we now add up simply the first and second quarter of this year, you will see that we are slightly below EUR 25 million after six months. We are fully on track to achieve our communicated goal on the admin expense line. Moving on to our profitability development on slide 18. As Oliver mentioned in the beginning, we are seeing operating leverage in our business coming through. With revenues up 11% year-over-year and some cost discipline, we have managed to achieve a 28% increase in net income. To put it in simple absolute terms, on EUR 13 million of additional revenues, we generated EUR 9 million of additional net income. That would be an incremental net income margin of about 70%.
Including the strong first quarter and thus looking at the full half-year figures, the operating leverage looks very similar. Revenues up 15% or EUR 37 million, net income up 34% or EUR 21 million. This is on a fully reported basis, no adjustments for long-term variable compensation, provisions for personnel measures, or anything else. These strong results also led to the upgrade of our revenue and net income guidance for fiscal year 2025, which we communicated Monday last week. Revenue growth is now expected to come in between 4% and 8% versus 2024, which already was a record year for us. The revenue range we are aiming for now is thus between EUR 499 million- EUR 518 million. It is very likely that this year we will report more than EUR 500 million of revenues for the first time.
On the bottom line, we have also quite significantly upgraded our expectations for net income. We now anticipate growth rates of 15%- 25% year-over-year, ending this full year somewhere between EUR 128 million and EUR 139 million. This compares to our previous range of -5% to +10%. At the midpoint of our new guidance, we would increase revenues year-over-year by close to EUR 29 million and net income by over EUR 22 million. Again, a leverage on incremental growth of more than 75%. These upward revisions reflect our strong performance in the first half of the year, continued client growth, as well as disciplined cost management. We remain confident in our ability to deliver on those targets as we move through the second half of 2025. However, as mentioned earlier, it is likely that we see a certain normalization of trends again.
Our aim for the next six months is to beat the second half of 2024, not H1 of 2025. Keep in mind that the fourth quarter last year already benefited noticeably from higher trading in connection with the U.S. election towards the end of last year. With that, I would like to conclude our presentation, but just before handing back to Achim for the Q&A, a final remark. We are constantly evolving as an organization, also when it comes to our financial reporting. With our monthly and quarterly releases, including preliminary results for the first half-year, we believe that we are already providing a full deck of high-quality information to analysts and investors in a timely manner. Historically, we have published a half-year report for flatexDEGIRO AG about eight weeks after the end of the first half period, i.e., towards the end of August.
While this is perfectly in line with capital markets regulations, the German corporate governance codex is recommending a slightly faster publication, which is something we will also now adhere to. This means that we will release the full half-year results in full on August 14th, roughly two weeks earlier than originally scheduled. Now, Achim, back over to you.
Thank you, Benon, for running through the latest numbers, and also thank you, Oliver, for your introductory remarks. We are now happy to take your questions, and I hand back to the moderator to guide us through the Q&A process.
If you wish to ask a question, please dial pound key followed by five on your telephone keypad. To withdraw your question, please dial pound key followed by six. I repeat, to ask a question, please dial pound key five. We have our first question coming from Andrew Lowe from Citi . Andrew, your line is open.
Hi guys, and thanks for taking the question. I had a couple on, and the first one was on the commission per trade. This was EUR 4.72 in Q2, which is flat quarter on quarter once you strip out the connection fees, and your Nordic peers suffered a 5% - 10% decline quarter on quarter. I'd love to hear a little bit more about the drivers here. Specifically, how did the margin evolve throughout the quarter? Was this significantly higher than the EUR 4.70 in April, driven by the U.S. share dealing and volatility, and then normalizing to something like EUR 4.50 in May and June? Am I correct in thinking that there was a limited mix effect from the crypto trading? You flag EUR 175 million of volumes, which suggests that it's probably only about EUR 1 million of commission in H1.
How meaningful is the mix effect from higher activity in the flatex brand? Final one, if you could comment on your expectations from H2 and beyond, that would be great.
Thank you, everyone. Let's start with your commissions per trade question and the drivers. Let me first reiterate that we typically do not do a full set of analysis based on the monthly figures. It certainly was higher in April than in May and June, but we are not computing the numbers and comparing them in a structured way. The effect as to the commission per trade was mainly driven by the U.S. trading situation. We still enjoy an elevated number of U.S. trades compared to last year. Sequentially, it actually went down slightly, but what's really driving the commission per trade is the meaningfully higher notional value of trades. As the flatex and particularly the DEGIRO platforms mature and clients grow older and more wealthy, the average size of a transaction tends to go up.
The FX conversion fee that we charge on the platforms, particularly on the DEGIRO platform, is thus directly linked to the size of a transaction. This is really where the kicker comes in, and this is where we benefited from being able to execute a higher notional volume of foreign transactions, mainly U.S. flow. With respect to the crypto offering, the uplift by the flatex crypto offering was in the quarter approximately EUR 0.02. You see that we were able to generate meaningfully higher commissions per trade for the crypto trades, resulting in a EUR 0.02 pickup. Saying it differently, without the crypto offering, our commissions per trade would have been around EUR 4.70 for the quarter. Yes, your final question, and I hope I got this all right with respect to the topics you raised, flatex was indeed seeing a more direct response to the trading activity compared to DEGIRO.
This is driven mainly by the fact that while Europe in general has experienced a larger focus from global investors and retail investors over the last six months, within Europe, Germany is standing out a little bit given the changes we have seen in Germany on the government side and the commitments that the German government has done with respect to spending on investments, spending on defense, and other things. The flatex pickup was particularly noticeable, which is also shown in the different growth rates we have published. That would basically sum it up.
Thank you. That's really helpful. If I could ask a quick follow-up on the flatex point, if that's okay. You've posted what looks like quite low commission expense as a share of interest expense, but we have to wait until 14th of August before we get all those details. I think you flag in the release that there's some effect from more participation in the flatex trading. Maybe if you could just also follow up with some commentary there of why that seems to be lower than expected.
This is a question which has a couple of elements. Probably one of the key elements is our increased operational efficiency, where we are able to meaningfully streamline parts of the operations that have an impact on the line. The volume effects trigger that. What's also clear, it's also a similar answer I gave you a few seconds ago. The notion of the trades gets bigger. That has a positive influence on that, given that exchanges, clearing houses, and such more often than not charge you on the actual trades, not necessarily on the volume that goes along with that. Plus, we still have the general interest line, which has a very high fraction. That all leads to a reduced box line, whereas the first two factors I mentioned particularly lead to a reduced commission expenses line.
Great. Thanks so much. That's super helpful.
The next questions come from the line of Ian White from Autonomous Research. Ian, your line is open.
Hi there. Thanks for taking my questions. A few from my side, please. First of all, on the current personnel expenses, you're saying it would have been about flat in 2Q without the specific provisions, so about EUR 25 million. Is that a sensible quarterly run rate for us to 2H 2025, or is there some seasonality we should expect to see perhaps towards year-end? When should we expect employee headcount to start growing again? I know the FTE count is down by 40 since year-end. I'm just trying to understand that progression, basically, of personnel expenses over the next 6 to 12 months, please. Secondly, on the securities lending product, can you talk us through essentially what clients earn and the sort of flow of revenues there?
I'm trying to understand clients' incentives to sign up for that service and whether the revenue that you receive is linked to, say, cash collateral received in exchange for the loan stock. Can you help me understand exactly how you earn revenue on that product and how clients benefit too? Lastly, on margin lending, does the price cut that you put through on 1st of July signal a steady state for this part of the rate-cutting cycle? Will margin lending rates go any lower, all else being equal, basically? Thank you.
Maybe I'll start with the first question, then I will hand over to Oliver for the question on securities lending, and we will then answer your third question. On the personnel expenses, you were right in highlighting the EUR 2 million, but what we were trying to say is that the EUR 2 million, if you compare them to the consensus for the quarter, you would be right in there. The consensus on the personnel side was around EUR 26.5 million or EUR 26.6 million. That's the delta to the number we have produced. If you now extrapolate that for the full year, that's probably the better number. We have committed to the fact that our personnel line is not to grow this year, and that's still something we stand by. Our headcount has been reduced, and we currently have no plans for the headcount to rise.
There is no answer to your question, really. There is no plan that headcount would grow again. Maybe I'll hand over to Oliver for the second ending part.
Yeah. Thank you, Benon. I can only echo what Benon said. We have no intention to grow headcount at the moment. We believe that operational leverage will help to keep the headcount flattish. Securities lending, basically, we have a fee share with our clients, and that is essential because it is the entry point for us to get to recurring income, recurring income regardless of market conditions and volatility. Obviously, securities lending revenues are also based on volatility, but it's a different form of income, and that is important for us going into the future to balance our revenues that move from only trading revenues and dependence on zero rates on residual cash on clients' accounts, that we split the fees we receive from securities lending between the clients and us in a fair way based on market practice and regulatory framework.
We said we will be clear in the next couple of weeks how that evolves and how many clients have taken that up, not to preempt anything that has not translated in reality yet.
Maybe the last question was on the margin lending price cuts. We have done two notches down so far. The ECB went down by 2% from the peaks. We went down by 75 %, approximately. Should the ECB stay at their current interest rate level, we do not expect today any changes to our headline interest income line. Should the ECB continue to cut meaningfully, then it's likely that we would at some point follow suit with a similar elasticity compared to what you have seen. I would finish that off, however, with the comment that there is a floor for margin rates. In the dark days of negative interest rates by the European Central Bank, we had a floor of somewhere around 4-point-something percent on a mixed level on the margin loans, which we didn't go below even in a - 50 basis points ECB scenario.
That is rock bottom for us. Today, the ECB levels at 2% suggest that with today's knowledge, this is roughly a rate cut plus or minus where we are. We are okay for now and don't model any meaningful changes in there.
That's clear. Thanks very much.
It was a pleasure.
As a reminder, if you would like to ask a question, please dial the pound key followed by five on your telephone keypad. The next question comes from the line of Christoph Greulich from Berenberg. Christoph, your line is open.
Good morning, and thanks for taking my questions. It's three from my side, please, and I will take them one by one if that is okay. The first one is a follow-up on the commission income and the impact from the U.S. trades. In Germany, we have the special situation that investors can buy U.S. stocks in euro on a German stock exchange. I'm wondering, what is the rough percentage of trades in U.S. stocks on the flatex brand that actually is done in U.S. dollars and earned a commission, sorry, an FX conversion fee compared to the share of U.S. trades done in euros? I was also wondering if you could provide us with the rough magnitude of how much of your total commission income in Q2 came from the FX conversion fee.
You will have to give us a second for the question.
Maybe, Christoph, you go ahead nevertheless with your second and third question, then we can look at the more detailed questions.
Absolutely. Yeah. The second question was regarding the timeline for the product initiative. You talked about the crypto rollout and the securities lending. I was wondering if you have any update on the B2B business where you were talking when you presented the strategic plan. You talked about a deposit-as-a-service initiative. I was just wondering if there's anything you can tell us about the timeline here and how the preparations are progressing.
Okay. Maybe I start with the B2B business. We are at the moment negotiating with two parties on contracts for this service. We expect to, at this moment, from what we know today, to finalize these negotiations in the next couple of weeks. It is, of course, too early to factor anything. It would be not appropriate to factor in any revenues as the contracts have not been fully signed yet. I think what the discussions are and where we are talking, the impression is that the appetite from the market for this business, especially to create NSFR revenues from retail funding, is very interesting. We also see this from the foreign banks that basically grant loans into Europe. There is also a rising pressure from the ECB to engage in local funding.
We still have EUR 3.2 billion of deposits in the local market in Germany that only earn an average coupon of 0.6%. This will also be accompanied by our own deposit offering somewhere in Q1 or Q2 of next year to add to the existing product line. Once those contracts are signed and we have better visibility on the ability of our clients to raise deposits with their own internet presence engineered by us, we will be more precise in the next couple of weeks and months. We are pretty confident that we can close at least one deal before Christmas.
Let me cover your first question. Let's start with your point that in Germany, a lot of the U.S. stocks are executed not in U.S. dollars, but in euros. That's, of course, exactly the same for us. If we look at the ratio of the directly executed trades in U.S. dollars on the different platforms, you can make a point that at DEGIRO, more than 90% of investment into American companies is done directly on American soil in U.S. dollars. It's different on the flatex side. On the flatex side, the ratio is very roughly speaking, you know, maybe one to three. For every three shares in U.S. companies executed in Germany on regional exchanges in euros, one native order is placed in the U.S.
This basically means that the conversion revenues on the foreign exchange side are meaningfully more relevant under the DEGIRO platform than the flatex platform, where DEGIRO accounts for more than 90% of those revenues. To finish off your question with some real numbers, I'm rounding a little bit, but on the DEGIRO side, it's EUR 15 million, whereas on the flatex side, it's EUR 1 million- EUR 1.1 million for the second quarter.
Yeah, that's very helpful. Thanks for that. Just a last one from my side regarding--oh, sorry.
Sorry, just to add to that, it is not certain that these transactions are always converted back into euros because clients can have a U.S. dollar account that basically keeps their dollars. They can also convert a bulk amount of dollars from euros and then use that and so on. You cannot just do the arithmetic on just looking at the U.S. trades and take the U.S. conversion as a given revenue.
Yeah.
Sorry, but there's no—
Thank you for that.
And then.
The next question comes from the lines of Mengxian Sun from Deutsche Bank . Mengxian, your line is open.
Hi. Thank you very much for taking my questions. Two questions from my side. The first one is on the crypto trading product. As you mentioned, there is some delay of one of the partners getting the MiCAR license. Do we have any visibility on when and whether they will get it? Will they get it before this summer, or are there any risks that the international rollout of the crypto trading will be delayed further? The second question is broader on the recent discussion on the German state pension plan restructuring. Can you share with us some of your thoughts? What do you think the potential changes would be, and how do you think it will shape the flatex business or the general industries in the midterm? Thank you.
Thank you for the question. I think it was two questions, one on crypto, one on pension reform. Crypto, with our partner, we stated in our presentation here that we expect to go live after the summer, which means summer holidays end in different regions in Germany on a different date, but the reality is not too far off. We're speaking about, whatever, four to six weeks from here, something like that. Of course, you never know which authority is also going on vacation and whether that extends the process. We're talking about a maximum of 40 days from today business days from today. That will be the absolute maximum from what we know today. I think we are starting the pre-registration as we speak, which means clients are already starting the onboarding process in their crypto addition to their product range they can trade.
They have to go through these tests and so on. I would say there's a lot of light at the end of the tunnel, and we are watching it to come. On the pension reform, I think there has been a lot of preempting in minor accounts and so on in the marketplace. The reality is most likely these products will only hit the market in 2027 when the regulatory framework is fully revealed. The reality is also that the current project of the government is put under financial education, which means the government is giving every child between 6 and 18, EUR 10 per month to basically try out an investment product. On a EUR 10 basis, it's great to have an investment account to play around, but you could also do a Börsenspiel.
The effect would more or less be the same because if you add it up, you have 12 x EUR 10 is EUR 120 multiplied by 12 years. That's at least from the top of my head, EUR 2,440. You add a little bit of performance, and the great news is somebody who becomes an adult with the age of 18 has probably EUR 2,500 - EUR 3,000 if nobody ever makes any money along the journey. We are hoping that the government is open to adjustments of their initial thoughts, which would mean that at least the parents and grandparents can add on to those savings. There needs to be a crossover from the Frühstart-Rente in a way to the Altersvorsorge system. That would require a change in the Altersvorsorge legislation, which means there needs to be an additional leg of retirement savings.
This is what we are still hoping for, that the initiative from basically last year from Mr. Lindner, the Aktienrente is really, with maybe some adjustments that it looks like are coming from the acting government, coming into play. There is, from the discussions, what at least I heard, that they are considering something around 15% of the Social Security barrier, which would mean something around EUR 10,000 annual savings. This is all rumors, and we are not basing our business planning on rumors. We are looking at the facts.
Generally speaking, any reform in pension, any change in the government accepting that the pension, the [IOU] pension in Germany, is safe but the level is not safe, and that individuals have to do something on their own, would also make a meaningful change in the tone the governments would have towards private investments in equity markets and ETFs, mutual funds, and so on. That alone could give the business a big boost and the entire industry a big boost. When you look at Germany, when you look at the equity participation rate, we are always so happy about this, whatever, 10% - 14% participation rate of the public in equity markets and investment markets. The reality is we are a financial illiterate region. We are underinvested in assets, broadly speaking, and there is massive upside. Yeah.
It would require a change in the retirement pension system that would result in a massive change of tone from the top. That would help to grow investment and custody accounts and investment accounts, from my perspective, by at least 50% over the next couple of years, maybe more. There are studies from Oliver Wyman and others on what the potential is. We believe it's enormous, but we cannot harvest this alone. We need the support of the governments. That should be accompanied by some tax bracket of those investments. That would also make European investment markets less dependent on foreign capital. I think the good news is the wave is really intact. Also, the European government under the leadership of Ursula von der Leyen is supporting this retail investment initiative. Things, maybe from our perspective, are a bit slow. We're hoping for a little bit of faster change.
We have to play by ear and see how things evolve. If it really comes and at which level, we are definitely very interested in participating and making our clients and their families and their children the right offer when the framework gets clearer. I hope that answers your question reasonably well. Thank you.
Thank you very much for the comprehensive thought. That was very helpful. Thank you.
We have a new question from the line of Christoph Greulich from Berenberg. Christoph, your line is open.
Thank you. Just one last one from my side. It's regarding the capital planning and just wondering how far you've come there and when we can expect an update from your side on the capital allocation strategy.
Yeah, we are on track to deliver on what we mentioned previously. That's something that we are currently developing. To remind everyone, it's bring our strategy updates and our top line update that we gave in February and align that with the required regulatory capital to grow and operate our business. Don't forget that our balance sheet in the bank or our customer deposits grew by like 40% in nine months. We are on track to deliver on what I promised to give you a detailed update by the end of this year, beginning of next year, respectively.
Very clear. Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any closing remarks.
Thank you very much, everyone, for participating in today's calls as well as for your questions. As always, if there are any follow-ups, Laura and myself will be happily available to any clarifications. Please just reach out to us. Otherwise, we wish you a great summer. You'll hear again from us on the 5th of August with our July figures. As mentioned by Benon, with our full H1 result being released on the 14th of August. Thank you very much. Have a great day.