Hello and welcome to the flatexDEGIRO preliminary results half year 2023 analyst call. Please note, this call is being recorded. For the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to CEO Frank Niehage, to begin today's conference. Please go ahead, sir.
Good morning, everyone. This is Frank Niehage. A warm welcome to our half year preliminary results, 2023. A warm welcome here from Tegernsee, where we celebrate the tenth anniversary with Borussia Mönchengladbach. The team is here in the trainings camp. Present are my colleagues out of the management board, which is Dr. Benon Janos, Stephan Simmang, Muhamad Chahrour, and myself, and obviously our head of IR, Achim Schreck. Warm welcome from Tegernsee. We are happy to talk today about very robust numbers. Before we go into details, a personal note, we also had to announce today that unfortunately, Muhamad Chahrour has decided on his own to leave the firm by end of this year.
As we are professionals, we like to focus on the firm's result first, and then Mo will give you a bit more details at the end of this call about his personal motivation, which I regret on one hand side, but I have to respect. You will see on the personal side why there is reasons that he will and has to leave us. However, let's please start with the firm first. Let's start with our highlights. I will always start as usual and then hand over to Mo, and he will shift gears and drill down into commercial and financial aspects, more in detail. I'm happy to confirm our guidance in a very challenging environment.
Needless to say, the geopolitical situation in Europe, the interest rate hikes, the high inflation will have and do have an impact on our business. However, we confirm guidance, we also have a very positive outlook for the second half due to the measures taken, and we will go into more detail very soon. I will also start with the regulatory environment, let me spend a short moment on what's going on with respect to our German BaFin regulator. Then I will talk thereafter about the European level PFOF, which will have a severe impact on our industry as well. Let me start with the well-known aspect of BaFin.
We are very positive that we have fully automated the process and developed and implemented with respect to the credit risk mitigation techniques. That was hard work. We were very close with BaFin and our special auditor. We have handed over all the relevant information. From our side, the work is done, which is very good news. The process runs and is implemented. Now it's up to the commissioner to take his samples and review everything and report it back to BaFin. We are very positive in respect that by end of September, we will get a feedback on this. Hope then after that be able and allowed to apply the credit risk mitigation again, as we temporarily were not allowed.
Obviously, we continue to aim on other findings and work on this. What's relevant with respect to hiring new people and implement new processes and to run that project has been done, so it's up and running. Allow me to mention after an audit, its normal course of business, then over 12- 24 months to work on those findings and improve, and that's what we are doing. You're already aware of the positive news with respect to the SREP. Our capital requirement was lowered by 75 basis points. Again, the first step in the right direction. In general, we will continue to improve wherever possible, this overall situation. That's the positive news on our German situation. Let me move over to the EU level.
Again, from my point of view, positive news. Why is that? A PFOF ban to me is strangening the single market view. The single market requires fair rules for all of us, which, in the past and up to now, it's not the case. In some countries, like the Netherlands, U.K., you are not allowed to receive a payment for order flow, and in others, you are. In my opinion, the EU moves into the right direction and will have same rules for all of us. Like always, there's a transition period from January 2024 until 2026 where member states have the possibility to have a different situation.
However, this has no impact to us and for us, because over 99% of our revenues, as we always said, are independent of any Payment for Order Flow. This is a good news for our industry, in my opinion, in general, it's a good news for us, and it's a good news for our clients. Why is that? As that has no impact, we will not have to increase prices, for instance, on the 4,500 ETF and saving plans, like it is discussed here and there in the media. We will continue, especially in Germany, for over 20 years, with our price model at flatex, EUR 5.90 per trade. We never touched that, and we will not touch that. Therefore, again, news into the right direction.
Obviously, the Retail Investment Strategy, we will continue to watch and report when there is any changes or impact on our industry. This goes to the regulatory environment. Now, I'd like to repeat and mention again, governance. As we always said, we will improve and develop our governance. At the annual general meeting, as you are fully aware of, Britta Lehfeldt was appointed, so now it's five supervisory board members, and we are happy that we are even more diverse than before. We are all looking forward to work together with Britta Lehfeldt successfully, as we already started in the bank. As now, the general assembly at the annual general meeting has positively voted for.
Again, we develop us, as always, set into the right direction with respect to governance. Obviously, let me also highlight the few business aspects. Obviously, we improved our relationship with the ECP partners and are very happy and proud that JP Morgan is our new platinum partner. The work is great, and we are happy for that partnership, and everything is on track and works well. A long, long time ago, we mentioned that we work on a digital wealth product, and we are happy now that our partnership with Whitebox, who we knew from the B2B side for many, many years, is now live on the B2C side as well. flatex wealth has started and taken off this month.
We are targeting here potential new clients who do not decide themselves, but rather want to go for a managed strategy. We hope that the dormant clients who are not trading at all for a long, long time, instead of doing nothing, might rather have an alternative when they look at the potential offering of that wealth management product. We wish good luck for this, and I move ahead with, you know, adjustments we did at DEGIRO, especially. We increased the rate on our loan product. Obviously, over the last month, interest rates were increased, so we adjusted here as well with respect to our credit product and improved.
We did a bit on the commissions with respect to U.S. trades and local trades. This all in all, will have a big impact in the second half, we are looking forward to that. Again, in Spain, we were awarded Best Stockbroker with Rankia for the seventh consecutive time. Again, a great tradition we try to continue with and again, positive highlights so far. We will promise to work on it more hard and bring up more of this in the future. In general, this is, yeah, the beginning. Now we will shift gears, and I will hand over to Mo, like always. Mo, the floor is yours, please.
Good morning, everyone. Thank you for joining today's call. As Frank said, let me first brief run you through the financial deep dive of the first half year. Then I'm asking for five minutes to give a little private note on the announcement of this morning. If we jump into the commercial performance of the company, we have to admit that under the given circumstances and under the given environment, we've continued to manage our customer growth very, very well. We have increased the number of customer accounts in the first half by 186,000 clients with an annualized retention rate of 98.1%, which equals a churn rate of 2%.
The net growth was 162,000 accounts. As you remember, we have forecasted this year 1.5 growth, a customer account growth of 1.5x-2x our European peers. Actually, the account growth in the first half was 2.1x the relative growth of our peer average. The relative share of customer accounts growth per month is the following seasonal pattern. We are showing on Slide 11 what the seasonal pattern looked like in the years 2016 until 2019, to just actually adjust for the COVID years and the mean stock years. What we see is literally that we are very much in line with what we have seen historically with respect to seasonality.
Strong customer growth in the first quarter, which usually drops in the second quarter, then in the third and fourth quarter, it usually picks up again. Absolutely in line with respect to seasonality on also in terms of absolute number, in line with our forecasted numbers. The second important point, or actually not the second important point for us with respect to customer growth, the most important point is the development of the assets under custody. We are looking back to three, four years where customer growth, the absolute number of customers was usually the most important thing. We actually see here the importance to highlight like what the asset under custody development looks like.
As of June the thirtieth, we have reached an all-time record of EUR 47.8 billion in assets under custody, which are split in EUR 44.2 billion securities and EUR 3.5 billion in cash. What we see is actually two things. The first thing that we see is that our net cash inflows are still positive. Now with EUR 2.9 billion in the first half. We had in total roughly EUR 6 billion of cash inflow, EUR 3 billion of cash outflow. The delta of it, the EUR 2.9 billion, is the net cash inflow. Quite interesting to see, we are again and again highlighting we are not a saving bank, we are a transactional bank, we are an online broker.
The evidence for that is that 91% of the net cash inflows of EUR 3 billion were invested into securities by the clients. The actual growth in cash was only EUR 0.3 billion out of a total EUR 3 billion net cash inflow. Coming to the trading activity, the trading activity dropped compared to Q1. I just mentioned it. It has also to do with seasonality effect. Q2, as I already mentioned in our first quarter call, is expected to show lower transaction activity. First, given because of, in general, less trading days, second, also, because Q2 historically has been the weakest quarter in terms of transaction activity.
We are absolutely in line with the trading activity of our, let me call it, most admired peers, Nordnet and Avanza. Also there you can see the drops between Q1 and Q2. The patterns follows flatexDEGIRO patterns, follows absolutely a market pattern, and is with no respect idiosyncratic or. And I'm highlighting this point because, as you remember, very often we've been challenged with respect to the quality of growth, and if the quality was worse than our peers' quality, we would have to see a literally stronger drops in activity. Since it's absolutely in line, it confirms at least that the quality is as good as with our peers. I'll just touch on this point: Activity follows seasonal patterns.
In the history, if we look back, usually, 26% of all transactions happen in the first quarter. 23% of all transactions of the year happen in the second quarter. This is exactly what I mentioned, is historically the weakest quarter. Our first quarter was slightly stronger than in the past. The second quarter is absolutely in line with historical seasonal patterns. We feel pretty good with respect to the residual six months of this year and our forecasts and guidance that we will come to in a moment. If we come to the commercial aspects, I mean, most of you have read them obviously, and see them.
The adjusted revenues quarter-on-quarter, they dropped by 8%, mainly due to the fact that Q1 versus Q2, we are missing 3 million transactions that were done in the first quarter, but did not happen in the second quarter. 3 million transactions with EUR 4 of revenue per trade, or actually a little bit more than EUR 4. To use it for the mathematical calculation, we're talking about actually EUR 12 million of revenue drop. The drop is not as heavy as the EUR 12 million. It's only EUR 7 million. The reason for that is obviously the improved, significantly improved monetization on the one hand side.
On the other hand side, also, to a much more bigger effect, also the increasing interest rates for the deposits in the second quarter compared to the first quarter. The commission income is much more in line with what I just discussed or what I just mentioned, the drop of roughly EUR 12 million-EUR 13 million. This is what explains the drop from Q1 to Q2. The similar drop is also between Q2- Q2, because also in Q2 2022, we were at 16.2 million transactions, so also a delta of 3 million. The interest income is record high, obviously driven by two mechanisms.
The first one, as I said, is the deposit, the deposit facilities that are enjoying month by month, more and more interest gearing, so to speak. On the other hand side, Frank mentioned it, at the first of July. It's not reflected obviously in Q2, but as of the first of July, we have increased the margin loan interest rates with the DEGIRO that will also have a significant impact on the second half interest income. The commission for trade is still relatively flat in this range of roughly EUR 4, with a little bit of uptick towards EUR 4.17 in Q1 2023. The drop from Q1- Q2 is mainly explained by the drop in transactions.
3 million less in transactions equals also significant drop in high revenue transactions. Point number two is that there are some countries that are charged in the first quarter that also fall out in the second quarter. If we look in the second quarter and take more a monthly perspective, June, which was the first full month with the newly implemented fees on the DEGIRO side, did a commission for transaction of north of EUR 4.20. We are now absolutely in line with what we expect going forward for the second half. Obviously also the April month, which was a super weak month, had a dilutive effect also on the Q2 commission per trade.
As of now, Q3 will be, so to speak, the quarter to confirm the price increases on both ends, interest income as well as commission income. As I said, June has already provided us some transparency with respect to commission per trade and interest income. L ast call, w e had a discussion about the low, the elasticity after price increases, and I know that some of the covering sell-side analysts have questioned and have challenged the elasticity that results from price increases with DEGIRO. Let's say at least build a correlation between price increases and transaction activity.
To clean up this myth, we are providing this slide that shows literally the indexed trading of U.S. stocks, flatex, and DEGIRO beginning in the 1st calendar week of 2022. What we are showing is literally that we indexed on for the brand flatex and for the brand DEGIRO, the number of transactions in the 1st calendar week of 2022, and have sketched, so to speak, both graphs until the most recent week and the development of the trade in U.S. stocks. Why U.S. stocks? Because we mainly changed our pricing at DEGIRO with respect to U.S. stocks. The evidence that we want to bring to you is that the changes in fees with DEGIRO did not affect the transaction activity on the DEGIRO side.
Since we didn't do anything on the flatex side, it's the perfect benchmark for the activity development. As you can literally see, both graphs are developing literally at exactly the same magnitude. Actually, over the recent weeks, the DEGIRO graph is above the flatex graph, which means that actually the activity, the index activity at DEGIRO is higher than flatex. What we did is over the recent 18 months, first, we increased the FX fee from 0.1%- 0.25% at DEGIRO, with no changes at flatex. In September 2022, we increased at DEGIRO, the handling fee from EUR 0. 50- EUR 1, with no changes at flatex. In mid-May 2023, we changed the U.S. commission from EUR 0- EUR 1, with no fee change at flatex.
What we see is actually a parallel development of our trading activity. Again, the drop in activity is not an idiosyncratic result. It's literally market driven and defined by the environment in which we, which all mature online brokers have to operate. Actually, on the loan side, it's a little bit different, and actually positively surprising us. We did the same thing also for margin loan changes. The blue line is again, the DEGIRO, the orange line is the flatex. What we did with the DEGIRO is, as you know, already last year, so at the beginning of this year, and on the 1st of January, we increased the margin loan rates for the DEGIRO clients, and we did so on the 1st of July, again.
We indexed as well the usage of margin loans at flatex and DEGIRO. What we see is let me put it the other way around. Funnily, since we increased the margin rates for DEGIRO, the volumes have picked up. Also here again, the volumes with DEGIRO have increased or are back literally to a level where we were in 2022. With flatex, we are still 10 percentage points down in terms of volumes. Long story short, what we want to show you here is that there is no significant, statistical significant elasticity on the volumes of DEGIRO loan amounts, given that we have changed the rates at DEGIRO and did not change the rates at flatex.
Coming to the OpEx side, I think it's important to highlight the key OpEx driver, which is obviously marketing expenses. We have promised that we will reduce the marketing expenses throughout the year. Actually, there is a significant reduction in marketing from Q1- Q2 by roughly EUR 9 million. In Q1, we were at EUR 17.2, in Q2, we were at EUR 8.3. For the residual year, for the residual six months, we budget roughly EUR 11 million, which totals then roughly EUR 36 million. That would equal to a drop in marketing spend compared to last year by EUR 13 million or 25%.
We expect a further significant decrease in 2024, since in 2023, we still have the sponsoring of Sevilla FC, which went perfectly fine with winning the European League, obviously, but also had an impact on a one-off cost, because we had as usual in these contracts a bonus clause for winning the European League, which kicked in to the surprise of many people, which will drop out next year. We expect also for next year, even lower marketing cost than EUR 36 million, which we expect for this year. I mentioned it, the sponsorship of Sevilla FC came to an end at a superbly high note, winning the European League.
A great success, especially also not from a sportif perspective, but also from a brand awareness perspective for our brand, DEGIRO, and for the flatexDEGIRO group. We have here shown a little bit the amount of DEGIRO web searches during the final game on normal Wednesdays versus the final Wednesday, which shows a significant pickup. All in all, a very, very successful sponsoring agreement, a sponsoring engagement that comes to an end. Thanks to Sevilla FC, to the whole team, to the whole people at Sevilla for having us as a sponsor, and for the great hospitality that we enjoyed and the great support on all media channels, whether social media, TV, and finally, obviously, winning the European League. Last but not least, on some numbers with respect to OpEx.
I think it's important to highlight that we had some non-recurring effects, one-time effects on our OpEx side. We mentioned it in the first quarter. We paid to all our employees EUR 3.3 million of a one-time tax incentivized inflation compensation. This was a tax incentive provided by the German government, where we were able to pay, so to speak, a net amount as a gross amount to our clients. Without any taxes and without any social payments that we had to take, and we made use of this. This was capped to, if I'm not mistaken, EUR 3,000 per employee, and we have made use of this scheme.
On top, as I just mentioned, marketing, we had an additional expense that due to the European League winning of Sevilla FC in the second quarter, that is absolutely a non-recurring item. Last but not least, we mentioned the EUR 1.1 million fine in Q1 by BaFin. Another legal dispute in which we are currently is with the Italian Competition Authority, where we had a EUR 4 million fine prepayment in Italy that is based on a competitor's claim. This claim did not come from a client, did not come from any regulatory body. It came literally from a competitor in Italy, and not only against us, but against also some other competitors in the market.
We are following this, obviously, this legal dispute with very, very high diligence, are supported obviously by a worldwide known legal firm. We have appealed this decision, and both we, but also our legal support, sees very high probability to win the appeal. And also an information that was interesting to find out that only 14% of the, so to speak, spoken penalties and fines by the Italian Competition Authority, only 14%, came into effect after decisions were appealed in front of the court. We absolutely see here no basis for this fine. All our arguments were not heard, and this is something that we will now bring in front .
Actually, we did already bring it in front of the court, in Italy, to be decided on a court level. Despite all these one-off effects, the adjusted EBITDA provided in second, the second quarter was quite positive, with EUR 34 million, which is a quarter-on-quarter growth of first for 13%, a year-on-year growth, quarter- by- quarter of 24%, despite much, much lower transactions, which I think proves the cost discipline that we have started this year. That will obviously become much more visible in the coming next two quarters. The accounted EBITDA is also with EUR 29 million in Q2, relatively stable.
What you see is actually that we build EUR 5 million. Sorry, we released EUR 5 million of SARs provisions, sorry, no, we built EUR 5 million of SARs provisions between or in during Q2, which reduces the adjusted EBITDA from EUR 34 million- EUR 29 million. Coming a little bit to the full year perspective, Frank mentioned it, we are absolutely confirming our guidance in the end, which was EUR 380 million of revenues, 40% of EBITDA margin, 30% of EBT margin. The assumptions have been mostly stable. The customer account growth of 1.5x-2x times ahead of peers is continuing. The number of settled transactions has been adjusted in the assumption base.
We started the year with the assumption of 65 million. The assumption for this year is now 58 million transactions. The lower assumption and number of trades is balanced out by the higher commission per transaction of EUR 4.15 for the full year. The average interest rate on margin loans is adjusted to 5% as an assumption. The average interest rate on the remaining cash under custody has been adjusted to 3.5%. The costs will most likely benefit from the mix, given the fact that we do less equity trade than expected, the settlement costs will also come down.
We will see an effect on the cost on the one hand side, and on the other hand side, obviously, since the interest income has a higher share in total revenues, we will see also a positive effect on the relative costs. The OpEx were explained and marketing has been explained. If we look into both P&Ls, the actual P&L for H1 and the implied P&L for H2, we see roughly the same commission income for the second half. 10% -12% increase in interest income. The other income will be most probably stable, a little bit coming down, given also conflicts that we have discontinued.
We definitely expect to reduce further the OpEx, as we mentioned, and are aiming for a high 40% EBITDA margin, adjusted EBITDA margin in the high 30s%. EBT, adjusted EBT margin for the second half, and if you combine these two P&Ls for the full year, you will see that this is more or less what we have guided for the full year. That's it. With respect to the preliminaries, with respect to facts and figures, thank you. Warm thank you to all colleagues, from the whole board, for this successful first half year, despite the environment that we are operating in.
Before opening up the Q&A session, allow me to take 2, 3 moments to describe and tell you a couple of things about my decision that we announced this morning. As you all have read, I prepare to bid farewell to this exceptional organization that has been my professional home since 2015. It was, it was obviously, also for me, literally a home where I spent more time with than actually with my own family over the recent 8, 9 years. From its humble beginnings as a German small online broker, we have witnessed the remarkable transformation of this company into the European market leader, and it has been, for me personally, an incredible journey.
Filled with countless challenges, we had big triumphs. We had a lot of lessons learned that shaped me as a person and actually as a leader. I'm filled with a profound sense of gratitude and pride, when I reflect upon this time. I have to admit, it has been a privilege to serve, to develop and to lead that company. I'm very thankful and grateful for the trust and that the Supervisory Board, that Frank in very early days, that I was given in this game very early in 2015.
Leaving a position that I've cherished for so long, first as a CFO, then as a Co-CEO, then as a Deputy CEO and CEO of the group, is undoubtedly bittersweet. Rest assured, it was a very difficult decision for me. A decision that I took the diligence and the necessary time for, to decide upon. I know that I'm surprising a lot, and maybe even disappoint some people with this decision, but I'm convinced that the change is an integral aspect of growth, and something that I've always preached to colleagues, to employees. Thus I'm filled with a deep sense of excitement and optimism, what my new professional chapter will look like after my remaining time with flatexDEGIRO.
A break, a personal break, where I will take care of my private matters, of my family. You know, it was also personally a tough year with the losses that we had in our family over the last 12 months, losing father-in-law and losing my own father. Taking the time to reflect on a couple of things and to fill up batteries to literally hopefully follow the next professional destiny. I want to express my deepest appreciation to all of you, colleagues, employees, the supervisory board, investors, clients, analysts, stakeholders, regulators, business partners, family and friends. Your support during this trailblazing years was and has been always a driving force behind our accomplishments, but also personally, my accomplishments.
We've developed great relationships, delivered exceptional results, and created, I'm very sure, a very lasting impact in the online brokerage industry. We have developed together the European market leader. Although I will continue to support specific internal topics and projects, this is my last IR call for flatexDEGIRO. I think it's very important. This is also something I absolutely believe in, to have a thorough and consequent transition, especially of the capital market communication. Thus I'm happy to hand over the responsibility for investor relations to our CFO, Benon Janos. I'm very sure that Benon and Achim, and obviously Frank, will continue to answer all your questions at least as good as Achim and I try to do.
The last personal note, Frank, I'm immensely grateful for the mentorship, guidance, and the knowledge that you have generously shared with me. Your support definitely has shaped me into a better person and leader, and I know that it's a disappointing step, but I've absolutely no doubt that this company will continue to thrive and deliver. We have an excellent management board that is now back to three people, that will hopefully increase at the end of the year after the approval by the regulator to four people again by having Christiane as a CHRO in the group. I have no doubt that this company will continue to thrive and to deliver. I'm absolutely excited to follow the development as a shareholder from the sideline, so to speak. Yeah, that's it.
Thank you very much, everyone, for the great journey we've had, and we've shared over so many years. Again, a personal thank you also to all the long, lasting and early time investors for the last eight years. We've spent so many times, discussions, and points together. And thank you also for the support that made flatexDEGIRO, what it is today. Goodbye.
Thank you, Mo, very much. Before we open up for Q&A, let me make a short comment. Obviously, I regret a lot that you're gonna leave us. It was a successful journey we had together. Unfortunately, we share the same experience. You lost your father this year, I lost my father this year. Without going too much into private details, I have a great deal of understanding on the private side, that you will take care more of your family and, take a sabbatical to digest those things, and that I respect, and I hope everyone else will respect that, should respect that. With respect to the company, we've run this business, in the group management board level, long, long time and many years alone, the two of us. Now, we are four.
I'm rest assured that Benon, Stefan, and I will continue to run it successfully. As you said, subject to BaFin's approval, which is expected by end of the year, Christiane will join with respect and effect of first of January, we are back to four. I'm also happy that you continue as a shareholder and will support us. I also appreciated your comment that you will not continue to work for any competitor, and having worked with the market leader and grow this business to European market leadership. I appreciate that a lot, I wish you, for your personal belongings and for your personal life, all the luck you've deserved and whatever you expect, I trust when you go back into the professional environment, you will continue to be very successful.
I wish you all the best for that as well.
Thank you very much, Frank.
Thank you for all the great years, and now we open up for questions.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question on today's call, please press Star one on your telephone keypad. That is Star one for your questions today. We will pause for a brief moment. Our first question today comes from Ian White, from Autonomous Research. Please go ahead.
Hi there. Thanks for doing the call and for taking my questions. Just to start, I'd like to a quick congratulations to Mo on a very successful tenure, and thanks for your help during my time covering flatex. Just a few questions then, please, if I can. First up, on the this issue regarding the Italian Competition Authority, can you just say a bit more about that, please? What exactly is it that you are alleged to have done that's contravened guidelines or whatever the Competition Authority has in place? Why have you chosen to prepay this fine if you kind of think ultimately you'll be successful in your challenge against it?
Is EUR 4 million the upper bound of potential liability here, or could that go further? Just wondering if you could provide a bit more detail around that issue, please. Secondly, just on this question around the Retail Investment Strategy, appreciate that you don't basically don't earn PFOF in your business, but I understand that you do receive sort of significant payments from the ETP providers. The Commission's proposal is that third-party payments will be banned, as far as I understand it. Can you say a little bit, please, about sort of how you see the risks there to your revenue stream?
The ETP providers, is that at risk, basically, if the commission's proposals continue as they were drafted earlier this year? Just finally, wondered if you could share with us what was the total CapEx in 1H 2023, please? Thank you.
Let me start in general with Italy. It's the antitrust authority which has imposed a final EUR 4 million. That's the final sum. Can't be higher. Second, it's Italian law that you have to pay the fine in advance, regardless of whether justified or not. Obviously, the Italian have a little business model invented here because they always impose fines, they receive the money, and then only if the parties who are involved go to court and fight that decision, they have to give the money back. We have reviewed all the public available information on that, and there were over 20 cases, where the result is that no more than 14% of the total sum imposed had to be paid and were legally justified.
Obviously, we have appealed in court, and we trust that we will get either the total or at least a great sum of that fine back, because we believe in general, that we behaved and complied with what market standards are in Italy. I don't want to prejudice the legal court here, and we leave it to the judges finally, to decide over that. This is in general, a comment and maybe more you wanna mention a bit more about the details, if necessary. With respect to the PFOF situation, I think technically you have to distinguish between commissions paid by investment banks to brokers and other parties with respect to ETP products.
To my understanding, that is not part of PFOF, that's a different ballgame. Yeah, maybe more, you wanna comment on the other aspects or give a bit more detailed information, if necessary.
First, thank you for your warm words. To cover up, the Italian point was absolutely, as Frank said, it is what it is. You have to prepay fines. It's different in, I think, mostly, and not even all European jurisdictions. You pay when you have the final decision. In Italy, you have to prepay fines, you can still appeal then. With respect also to the ETP topic, I think we have started, Frank, also, we have started already two years ago, to change the structure also of the ETP settlement into a more OTC situation between us and the product partners.
On top of that, there is one, two strategies that we have in our drawer, so to speak, what to do if for whatever reason there might be an ETP ban, which does not, which is as of today, not given. In the Netherlands, for example, you have seen some players that then use white label solutions to provide ETPs to the market. We could do as well if necessary. With respect to your question, I think it was the last one with respect to CapEx. Allow me to say that we will provide all the balance sheet details and cash flow details, P&L details in the report that is going to be published mid of August.
Okay. Okay, thanks very much. Maybe can I just come back on the first one, just briefly? Sorry if I've missed this somewhere, but what is the, what's the actual accusation against the, against the company, please? What is the alleged wrongdoing, for which this sort of preliminary fine has been imposed? Can you just provide a bit of detail there, please?
Absolutely. Absolutely. Sorry. It is actually the vast majority of the fine is with respect to an absurd topic from our perspective, but also from the industry perspective, we discussed it with different regulatory bodies even, and all of them cannot understand it either. The topic is the AutoFX. When clients have euros on their account and they buy an Apple share at Nasdaq, we have to convert the money, obviously. We cannot settle against Morgan Stanley, the prime broker in Europe. We need dollars to buy Apple. The default setting, which is actually the default setting globally, is to do it automatically. The client, however, has also the option to open with us a U.S. dollar account.
He has to open up a second account, which is a second reference cash account, where he can then park U.S. dollars. They say that we are providing, so to speak, a disadvantage to clients by having the AutoFX standard product. We have obviously analyzed the whole European market, there is literally half of the market, does not even offer U.S. dollar account, so clients are forced into automatic FX conversion. Those that offer FX account, all of them have, as a standard default, to have automatic FX conversion. In Italy, as we said, there's a competitor that opened up all this discussion with us, and not only with us, but with also one, two other players.
The funny thing is that this competitor himself has, as a default, the AutoFX for his clients.
which is an absurd discussion, and this is the vast, or this explains the vast majority of the fine.
Okay, got it. Thank you.
You're welcome. Next question, please.
Thank you. We move on to Christoph Greulich from Berenberg. Please go ahead.
Yes, good morning, thanks a lot for taking my questions. Three from my side, please. Firstly, on the U.K. business, it seems like you've stopped onboarding new customers there a few months ago. Just maybe if you could tell us what is the reason for that, and then given that the U.K. has been classified as one of your growth markets, if you could quantify roughly the impact that had on the group's customer growth in Q2? Secondly, just on the future transition on the management team, are you planning to find a successor for the COO role, or is the plan to distribute most responsibilities among the existing members of the management team?
Then just on the PFOF, evolution or the recent news flow, what is your expectations for how this might shape or change the competitive landscape?
Yeah, let me briefly start with U.K., then Mo can go a bit more in detail if necessary. We have temporarily stopped onboarding U.K. clients because we're in discussion with the U.K. regulator about the new license situation. I'm convinced that we will come back soon on that and change that. As I said, it's temporary, I think the impact was not that big, to my understanding, but maybe Mo want to comment on it a bit more in detail. With respect to the position of COO, as I mentioned earlier, my personal note, Mo and I have run the group management board, just the two of us, for almost eight years, and it was very successful. Now we are four members here. Company has grown.
Temporarily, we will be three, soon we will be four. We will continue to take over and divide the responsibilities Mo's had among ourselves here, and we trust that we do that well. Anything else, we will comment on as soon as supervisory board has reached a different view. If not, we will continue like that, which for the time being is the situation. Mo is available until the end of the year anyway, and latest with effect of January first, we will have Christiane Strubel joining, and then we again, four ahead. I think that should be enough and will work well. I'm happy to hand over to Mo.
Yeah, hi, Chris. Let me just on the U.K. business, I think that to give also you the reasoning. It's literally a temporary point. As you know, we have stopped actually marketing the U.K. already two years ago, since actually the temporary regime. If you look into the number of clients, I mean, last year we did 7,000 gross new clients in the U.K., so it was not a big fact. We still consider it as a strong growth market, we are waiting for the final licensing, which will happen hopefully over the next weeks, latest in Q3. We will open up again, the onboarding.
The reason is mainly that we want to avoid the transitionally to this new entity that we have implemented during onboarding phase. This is why we also stopped it. Also in the discussions with the regulators, we came to a point that it makes sense to stop it and make the transition. As soon as we have the new licensing, we will be able to open up then the onboarding again. To your last question, Frank, the PFOF discussion advantages, potential advantages.
As I said, we believe in a single market with fair rules for everyone. I hope this will be more transparent and fair in the future. As we do not depend on PFOF revenues, it has no negative impact to us. Other than with neo brokers who have based their business model on PFOF. Obviously, this will have an impact on the industry, where I strongly believe that we're gonna benefit from it. As you always know, we have, you know, taken time to strengthen our organization, to do our homework. We worked hard on the learnings from the audit. I think we will head into a bright future, and we will look into organic and inorganic growth.
Obviously, the competitors, some of them, especially the neo-brokers, have to reinvent their business model when they cannot receive any more payments from the stock exchanges. In Germany, there is the Federal Court rule, as you are aware of, which does not allow market participants to increase fees via general terms and conditions with two months' notice, and then it's gonna implement it thereafter, as it used to be 20, 30 years ago, which was the common practice that is no longer valid. You need consent in writing from the clients before you can change that. Obviously, clients do not like that. If they were solicited, it was the aspect that they don't have to pay anything.
That's going to be a challenge, and maybe that's also the reason why the commission is giving two years transition period to give enough time to talk to the clients. We don't have to do that, especially in Germany, we always for 20 years, kept our EUR 5.90. That has not changed, and will not change with respect to equity trades and our ETF savings plans, products, I think amount to 4,500. We don't have a reason to change anything. Our clients will not be affected by this, but I think it's going to have an impact on the industry.
Yeah, great. Thank you, and all the best to you, Mo.
Thanks, Chris.
Thank you. Next question, please.
Our next question comes from Andrew Lowe of Citi. Please go ahead.
Hi, guys. Just a few from me. I thought page 18 and 19 were interesting, showing increased charges at DEGIRO. I'm interested in any thoughts that you may have on future pricing of flatex, where you've been more stable with your fee structures. Secondly, just in terms of the fact that you've got a number of inactive customers on your platform, I'm just curious what the regulatory challenges of this include. For example, how do you ensure that your KYC is up to date? The reason for asking is that one of your Nordic peers recently said that they have a regulatory obligation to keep KYC up to date, which is why they close inactive accounts. Just curious on your thoughts there.
Finally, just a clarification, did I understand correctly, that you said that your June commissions per trade was in line with your expectations for the second half of the year, with which your guidance implies EUR 4.25? Thank you.
I had some difficulties due to reception to really understand all the questions. The only thing I really understood was why commission decreased per trade. Mo is going to help you to comment on that. Mo, why don't you take over, please?
Yeah. I had my ear very close to the phone, so I tried to get it. The first, I think point was slide 18, 19, the DEGIRO versus flatex. If I'm not mistaken, your question was like, whether there are price changes with flatex, or strategies around flatex price changes. Am I right?
Hi. Sorry, I've changed away from the headset. Hopefully you can hear me better now. Yeah, that's right.
You could speak a little bit louder. Yes, please.
Yeah. Can you hear me now?
Yep.
Yeah. Okay, fine. Sorry about that. Yeah, basically, you know, what's the scope for increasing pricing in your flatex brand
going forward with the question?
Got it. The point with flatex is that flatex is operating in Germany and Austria, those jurisdictions that allow price changes under only under the active consent by the clients. Since the latest court decision, highest German court decision, which makes literally price increases so difficult because clients have actively to consent to these price increases. By the way, a topic that with the PFOF discussion for neo brokers will become quite interesting because a lot of people usually say, Okay, if they don't do any PFOF anymore, they can just increase a little bit or charge a little bit of fees. The point is, active clients have to give actively their consent to price changes, so to price increases. This is why at flatex we don't see any price changes in the next future.
With respect to, I think the second question was with respect to KYC and the BaFin audit.
Sorry, I'll just step in. It wasn't specifically the BaFin audit. It was just a question about what the kind of regulatory challenges are and obligations with KYC, about having a large number of inactive customers on your platforms. The reason why I asked that was one of your Nordic peers recently said that they have an obligation to keep this KYC data up to date, which is why they're active at closing inactive accounts, whereas you seem to take a slightly looser approach in allowing-
The request for KYC has increased significantly over the recent years by the regulators. Obviously, we're trying to the very best to comply 100% actually with all these requirements. Indeed, old accounts will become in the future, so let's call it non-terminated accounts with inactive clients, with maybe old documents, will become in the future a little bit more challenging to re-KYC these clients, et cetera. In the Nordics, you're absolutely right. In the Nordics, peers are already or have decided to close down inactive clients because it's much more cost efficient to close down inactive clients, especially if it's a EUR 0 account, so no cash, nor no securities, than to re-KYC.
This is something that will be in discussion, also here with us and the management board over the next weeks and months. Might obviously also lead with respect to our client pool to off-board old clients, when it's much more efficient to off-board them than to re-KYC them.
yeah, maybe one comment here. The flatex Wealth product is also one initiative to address inactive clients, because some clients might not know what to do and are inactive because of that. If you have alternative to do nothing and get zero revenues and zero return, versus a nice conservative strategy where you get 3%- 4% or 5% return whatsoever, might be an alternative. We will have further initiatives coming ahead, where we address inactive clients. If nothing helps, it might be a final consequence to do it as the Nordics have started to do it. We are working on that, and we have a close look on that, and we will make sure that we continue to be very compliant.
Your last point was with respect to commission, per trade, if I'm not wrong. If I'm not mistaken, you asked, like, how we see the guidance for the EUR 4.25, going forward, right?
It was just a clarification that June commission per trade was around that level.
Yeah, absolutely. This is what we said. We expect from now on, after the latest price changes, that the commission per trade will grow to EUR 4.20-EUR 4.25. Given the first half where we did not have this price mechanism, the full year average will be obviously diluted to the lower. As of July, the commission per trade should definitely go up towards EUR 4.20-EUR 4.25 per trade.
Great. Thanks very much. Sorry for the weak line.
You're welcome. Thank you very much.
Thank you. We're now moving on to a question from Simon Keller of Hauck & Aufhäuser. Please go ahead.
Good morning. Thanks for taking my questions. I have two. The first one is: How is the share of active customers relative to total customers developing? The second one is: What type of customers have you gained recently? Could you rather cluster them as day traders or buy and hold ETF investors? Thanks.
The share of active customers for the second quarter has not really, has not been released yet. We will do it in the update of the corporate presentation, but we are happy to give the number. It's 30%, so very relatively stable to the first quarter. That's point number one. Point number two: What type of clients did we win in the first half? To do this type of analysis, we need always a little bit of time, obviously. We will definitely also here provide the information then again, in the cohort analysis. Actually, in such environment that we have as of today, where clients are not really. The mass market is not really receptive for online brokerage.
The type of clients that we win is rather coming from experience, from the experience base, not on a day trader base, but rather active trading customers. The averages of the new clients that we won in terms of trading activity is very similar to the existing base. It's not like that we are now winning only clients that do 500 trades a year, nor do we win clients that don't do any trades. The client mix, so to speak, is very stable with respect to the existing client base. If that was the answer, next question, please.
Thank you. Our next question comes from Christoph Blieffert from Exane BNP. Please go ahead.
Good morning. Thank you for taking my question. ESMA recently made the statement that revenues from securities lending should directly accrue to the retail client, rather than kept by the bank or broker. Any comment on the impact from securities lending on your revenue line would be helpful. Thank you.
The short answer is, Mr. Blieffert, we don't offer securities lending so far, so no impact for us.
Thanks.
Thank you.
Next question, please.
As a quick reminder, that is Star one, if you'd like to ask a question today. We will pause for just a brief moment. There appears to be no further questions at this time, so I'd like to hand back over to you, Mr. Niehage, for any additional or closing remarks.
Thank you all very much for having taken the time this morning. We will continue to work hard. We are looking forward to more prosperous second half. Thank you, Mo, again. Dr. Benon Janos will take over. I trust he will do it with his 20 years of experience at Goldman Sachs very well and try to do it as good as Mo. We all are looking forward to stay in touch with you. If you have any further questions you could not provide today, happy to talk to you later or send us a mail, or give us a call. Have a nice day, all the best to you. Bye-bye.
Bye-bye. Thank you.
Thank you. Ladies and gentlemen, that concludes today's call. You may now disconnect.