Earnings Call: H1 2021

Aug 6, 2021

Ladies and gentlemen, good morning to the press conference of Swissquote Group Holding for the first half results. I would like to welcome you. The press conference itself will last about 30 minutes. We'll go through the presentation. If you can't see the presentation on your screen, then suddenly you have a chance to download it from our website. For the sake of a good organization. I would like you to I would ask you to mute your microphone during the presentation. And then at the end of the slide presentation, we'll have a Q and A session. And for the Q and A session, before you ask your questions, I would just ask you to raise your hand so that we can have an orderly Q and A process. With me on the table this morning is Ivan Cardenas, who is our CFO, he also will be available for questions at the end of the presentation. So let's start and let's dig into the agenda of our first half results. We will obviously give you some information about the about our figures for the first half. We will dig into the business update, as we call it. So we have a little bit more information on our different reporting segments. We will discuss about the guidance 2021. We'll have a look at the balance sheet. And then at the end, we also have a slide about our joint venture partnership with Post Finance with our Nelbank application, New, that has been very successful in its lounge and is growing according to plan. But let's go to the first half figures 2021 and with some very good news for us because that's the one factor that we can control the most, which is the account openings and the account opening requests. You see here in the first half of twenty twenty one, we had a massive increase in account opening requests up to 117,795 requests. That's created some issues at certain moment in our organizations because we were not ready actually to handle so many requests and especially specifically the questions all those people had, legitimate questions about our systems. And then our call center in Zurich was a little bit overwhelmed, but this is now sold. We have hired enough people so that we can again keep the service our clients deserve when they open an account at Swissquote. So this has pushed the number of clients to 459,800, which is obviously record number for from Swissquote. And you can see the distribution here on the slides between trading accounts, which is by far the largest type of accounts we have. And then we have eforex accounts and also a little bit of saving accounts, something out of the past. As you know, saving with cash at the moment is kind of difficult since there is interest rates, interest paid on almost any currency. So we have in the first half, we had almost 50,000 new accounts. And here what we wanted to show you is 2 things. First, the average deposits per account is now increasing. Again, we have we've passed the threshold of CHF 100,000. On average, the clients hold more about CHF 109,000. So it's a little bit compliant with our business model. We are targeting the mass affluent clients and offer them a very good service with a very broad service. At Swissquote, you can trade all type of securities, all type of currencies and these at a good price. So this is very important to note where our business model and business model is. We're not a deep discount broker. We have a nice segment that we cherish with higher deposits than what you would expect at other online brokers in Europe. Another very good news is that the clients we are acquiring are very active here the in the first half of twenty twenty one, we did 9% of total revenue Swiss clients we acquired in 2021. So you can see that this is good news for us because now these clients are with us. They have been acquired. And obviously, they will also contribute to the revenue in the second half of twenty twenty one. And if we go back a little bit, the clients we acquired over the last 5 years from 2016 to 2020 represents 61% of our revenues in the first half, but still also the older clients, the one that we acquired back in 2000 to 2,005 are still with us and still contributing a decent amount of revenue to the company. You see here the number 7%, then 12% and 11%. What we wanted to show you with this slide here is that once you have an account Swissquote. Normally, you stay there. We you develop the business with us. You bring as you get older, you bring in new assets. And we have a very loyal client base that are very active, interacting with us and asking us improvement or to add new features to the system. This is a little bit the success story of Swissquote, keeping the clients, listening to them, developing our business, offering new type of services. The charts that is probably the most amazing is the client assets. Here for the first time ever, we have crossed the €50,000,000,000 mark and with quite amazing net new money for 6 months. We have SEK 4,900,000,000 of net new monies that came to our bank. And that together with the good market performance pushed the assets over the mark of NOK 50,000,000,000 And you can see here going back in time, the growth story of Swissquote. I could go back to the inception of the company back in 2000, and you would see that these assets has grown over time, but never with an organic growth of €4,900,000,000 in 6 months. And I can well remember when we were much smaller company, we had targets of net new money of €1,000,000,000 for the entire year. And here, we are almost doing these figures in a month. This shows you how strong the brand has become and how attractive we are to many clients with the service we are offering. Obviously, the margin on assets has been really good. We have ended 'seventeen as a margin, 1.17%. So that's revenues divided ID assets under deposits and which is much higher than the bandwidth we have set in the past around 80 to 90. This obviously is linked to the very good markets we had in the first half, very volatile markets on crypto specifically, and this obviously pushed the revenues in the first half. And here, again, the net new money of €4,900,000,000 in the first half. I would like to mention that this is purely organic. We had similar growth in the past, notably in H1 2019 at €3,400,000,000 but there part of that money was non organic. It was linked to an acquisition we did. That's here in the first half, the 5, almost €5,000,000,000 is really made simply by the new clients coming to the Swissquote and also the other ones that improved their relation with us and deposited more assets. So that's the that's for us the most important figures we are looking at. This together with the number of clients if the growth story of Swissquote and is also the best guarantee for us to further improve our results the in the future. Okay, here, sorry. Little bit delays on my slide. So here, a chart about the origin of the net new money. So it's still a strong Swiss business. We have 57% of this €4,900,000,000 that is has been booked in Switzerland. That's the biggest part of it. And then we have the usual suspects. We have the Europe that accounts for almost €500,000,000 Middle East, Africa with €280,000,000 and then the Asian market with €1,400,000,000 So this is a similar pattern that you could see also in our previous reporting. Now just one mention, maybe for Switzerland, this is in headquarters. So also when we have institutional clients that would book and open an account, then obviously, this would be booked in Switzerland even though the clients are not domiciled or the companies or the B2B plans are not domiciled in Switzerland, but this is the place where it's booked. Net revenues of NOK 264,400,000. That's the record number, but you can see also here that going back in time, the growth pattern we had. Usually, the second half is a little bit slower than the first half. This is due to some seasonality with summer where clients traditionally are a little bit less active. But here, what is spectacular on this chart is the business with crypto. You can see the very strong growth here from the second half twenty twenty to the first half twenty twenty one. But also if you deduct the crypto business, then all the rest had a very nice growth fee and commission income did grow all the segments in the first half. Also without the crypto impact had a nice very nice growth pattern. So net revenues of 264 €400,000. Again, little bit delays with the slides. Here, sorry. Okay. So also one slides we wanted to mention, if the slide is coming here, sorry. We have tried to compute the net revenues by what we call Swissquote locations. The Swissquote is it has many subsidiaries and many rep offices in all over the world. We have office in Europe, London, Luxembourg, where we have a bank. We are also present in Malta, then in Dubai, Hong Kong, Singapore. We have and this in some places, we are a booking center in some places. It's a simple rep office and then the clients are booked in Switzerland. But here what we wanted to show you is that the Swiss domestic part of our business represents 65%, and then the rest is represents 35%. And if you now concentrate on this 35%, you see that here over time we had a nice growth. We did grow from about €30,000,000 revenues in the first half twenty seventeen to now more than €80,000,000 So this is very good news for us. This is also the results of strong investments we did in the past with international expansion that we pushed and because we know that Switzerland is a smaller country. So given our strengths and service offering. We think that we can be successful also outside of Switzerland, but this year is a little bit the results of that investments we did over the last year and very nice growth in with our operations outside of Switzerland. So again here, where are we located? In Switzerland, we have office in Glan Zurich, then in the UK, in London, Luxembourg with our bank, Malta, Dubai, Hong Kong and Singapore. Also another interesting charts that we would like to comment a little bit is that Swissquote is not only a retail business. It is to 78%, the retail business, but we have also many asset managers, money managers. We're doing business with other banks. We have white label solution. We're offering we are custody bank for investment funds. We're dealing with funds managers, bank brokers, and all these represents 22%. And here again, if you look back a little bit where we started in 2017, roughly the B2B business represents us €20,000,000 And here also over the last year, we had a very nice development of our business. It's important for us because the B2B part is a little bit less exposed to volatility. And so this stabilizes our top line and ultimately our bottom line. So we have invested a lot of efforts and money to develop our white label offering. And here, again, this is the results of our past investments. We think that the B2B segment is very attractive. It's we're one of the few banks and service provider that can offer the full range of services really from simple custody 2 execution brokerage. And also if requested by our partners, we also have white label solutions where we are putting our famous and well known e trading platform for our business partners. A good example is post finance in Switzerland. There we do everything from custody to brokerage to the technology where post finance clients can trade securities using our services. All this together here has a nice strong nice increase in profitability. In the first half, we did €134,600,000 So this is an incredible number when you think that this was our forecast for the entire year. We realized this in only 6 months and we're paying taxes obviously and we have now a net profit for the first time above NOK 100,000,000 in only 6 months. And if you have read our press release, you see that we aim to double these numbers compared to 2020 for the entire year as we are targeting now to have EUR210,000,000 of of our operating profit for the entire year. That would be double as much as the number we had in 2020, which itself first double as much as the number we had in 2019. Why are we so confident that we can achieve this? Simply because when we have had these amazing growth in number of clients. They are with us now. They are trading actively. And even though the market would be a little bit less volatile in the second half, we are very confident to reach our targets. This company has a track record of always reaching the targets they are announcing. Usually, we are overachieving our targets, at least it was the case for the last years. But certainly, when we announce the targets, we are able to hold it. Again, a little bit delays for the slides. Hopefully, it's coming here again. So we have a slide about the staff, the number of people here finally. So we aim to say that we are a technology powerhouse. Out of the 904 full time equivalent. We have 33% that are in the technology sector. That's probably much more than any bank in Switzerland. So we're really a tech company. Of course, we also have some salespeople. We also have infrastructure suppressed compliance risk, which is very important for a bank. And then we have 15% of our staff that is in our remote location. It's a very young company, so the average age of our staff is 34. We have 58 nationalities, but that's probably whenever you do business in Switzerland, you would have this type of mix, not because we want to be so international, but simply that's facts. In Switzerland, you have many nationalities and also because it is so difficult to hire IT specialists and software engineers that obviously we are also obliged to grow outside of Switzerland to hire the specialist we need. We improved much very much on our gender diversity. These figures was very different, but now we have onethree of our staff, which is female. That's really good news. And also we managed to reduce the turnover to 10%. That's, as you know, for tech companies now with the international competition on talents. This is something we have a close look at. It's good to have a little bit of turnover because this keeps your average age young and dynamic, but obviously more than 10% would also represent a challenge for the company. I can very well remember in the past when we had turnover in the magnitude of 20% to 25%. That means that you have to rehire the company every 5 years. This has improved a lot and also stabilizes a little bit our operations. But 904 people, that's a lot. Also here to mention that now part of the of our staff is working part time. This gives a little bit of flexibility in our organization and helps us growing the business immediately because the part time staff we're hiring are usually high skilled specialists and they help us pushing the developments when we need it. We are investing money into our brand, into our marketing. That's the game when you're an online company active in the entire world. We're very famous in Switzerland. And if you look here, we've just conducted a brand awareness on using Ipsos as a company to see a little bit where the Swissquote brand and how strong the Swissquote brand is. And here you see that top of mind when it comes to online trading, we have we are almost 25% of the people Duino Swissquote and then the if you push a little bit and thus Duino Swissquote, you see that the brand awareness now is almost 40%, 45%. That's as good as the bigger guys in Switzerland. And this shows a little bit the results of our constant investments in our brand with the various initiatives we took. But Swissquote is now is part of Switzerland. We have been the very first online bank. We have been the very first financial website in Switzerland. So it's a story actually that goes back to 1996 when we launched everything is also is the reasons why we are celebrating anniversary, 20, 25th anniversary since the launch of or not the bank, but the platform Swissquote CH already 25 years ago. One of the important numbers we're looking at is the equity. So the equity did now pass the threshold of NOK0.5 billion. It is an amazing growth and is this mandatory to develop our equity? We have a lot of business with B2B partners. We have high number of assets under custody. So we need to have a strong equity and the strong Tier 1 ratio to be able to fuel our growth in the future. We have strong capital ratio here, 24.3%. It did grow over time. Sometimes we pay an acquisition and then it has a small impact because we're paying our acquisition out of our excess cash, but the growth is so strong that we that it always goes back to levels above 20%. €544,000,000 of equity that gives us good opportunities to grow the business in the future, to finance our organic growth. And there is probably also a little bit of space for M and A activities in the future, but more to that a little bit later. So the first half year in a nutshell, €264,000,000 of revenues, €134,600,000 of pretax, €116,400,000 of net profit after the taxes. We had these amazing net new monies of €4,900,000,000 total clients assets above €50,000,000 core capital ratio of 24.3. And then the gross figures of the company, these are these account opening requests we experienced in the first half and then the number of accounts, 50,000 reopened. Now you couldn't say what happens to the others. Well, the they still some of them are in the process of being opened now. Sometimes we have a little bit of delay. Sometimes the account that's a little bit more complicated, but you are also picky with the clients we onboard. We are a Swiss bank. We have lots of obligation when it comes to be compliant. So we are very careful with the type of clients we are onboarding as a Swiss bank. Okay. Now we have a few slides about the our various revenue segments. And here, there's a lot to say and a lot to read about these slides. Sorry about that, it's a little bit charged with information. I would try to guide you through it. So first of all, you see the revenue. If we divide our clients in 2 segments, the trading business on one side and the ForEx business on the other side, you see here that the trading business is the biggest part of our revenue. This represents NOK 200,000,000 of revenues in the first half and also the number of trading accounts of more than 400,000. Now what are these guys trading? Day trading all type of financial instruments and this is the bottom right for the bottom right chart. You see that they do trade shares to 25%. They do cash and foreign exchange also to 20%, 26%. And then a big part of that is also crypto revenue up to 30%. And then the other usual type of financial instruments, we have structured products, derivatives, fixed income. We have ETFs and investment funds. And this year represents not the number of trades, but the revenue generated in each of these segments. But we again, as we already mentioned, we also have a lot of B2B clients. And if we now look distribution of assets. This is about half half. 51% are assets from retail plans, B2C and then 49%. These are assets deposited with from institutional clients. Now this does not reflect in the 50%, 50% on the revenue side because obviously on the assets from our institutional clients, we have a lower margin, but what we wanted to show you here is that the there is a well a nice balance between our B2B and B2C business. Another numbers that I would like to comment is the revenues by nature. Sometimes we have the feeling that Swissquote is just about volatility. When the market is good, the revenue is good. This is obviously true, but it's not the full story. We now also have a bigger part of our business or a big part of our business that is asset based, up to 20%. Asset based means custody fees, means swap revenues, interest revenues, even though it's becoming tiny small, but that all in represents 20% of our revenue in this segment. Speaking about crypto. This is something we strongly developed in the past, and we are continuing developing it. We believe in cryptos. We think that it has now become a natural part of our of the business. We don't think at all that crypto trading or the crypto business will disappear. Here a few numbers. When you're at Swissquote, you can trade 24 different cryptos. You can there's even one that we have launched together with our partner Post Finance is called Swisscoin. This is our own token, but you can only trade it when you have a new account. And then the other 23 are the classic cryptocurrencies that you would expect at the bank like Swissquote. Obviously, the biggest one Bitcoin and Ethereum. That is where we have most of the trades, but there are newcomers like the Dogecoin that has been pushed by famous personalities and also the latest ad to our family, it's called Polkadot. And in order to be successful and to offer and to please our clients, you have to developed this business and it's very rewarding since we now have already DKK1.9 billion of crypto assets under custody. This number you can expect these numbers to be quite volatile together with the volatility on the underlying cryptocurrencies, but that's a little bit the rule of the games. You need to offer excellent execution. Also you need to offer custody services so that the clients that would trade with you as a bank has a safe haven to deposits the cryptocurrency. A little bit about the number of clients. We had more than 60,000 customers that traded cryptos in the first half, but only a part of those clients, namely 10%, do exclusively trade cryptos. I've heard in the past that the growth in is just about crypto. That's not case. We also have traditional clients in brackets that would also trade crypto. This is even the bigger part, 90% of the 60,000 clients do trade other securities at Swissquote and then they diversify part of their holdings with crypto assets, which is probably a good strategy. Don't bet 100% on crypto, but spice up new holdings with crypto assets. And then also, we have a little bit of information about customer clients profile, surprisingly, you would see that 65% of our clients trading crypto are in the age of 40 to 60. So it's not just something for millennials. It's everyone is trading crypto and then we even have a number of 9% that are older than 60 years. And I think our oldest crypto trader is above €90,000,000 So you see this is really becoming an asset class fancy for everyone. And there also, and the last information here on the slides, we're not only offering B2C services, but we also 68% of the revenue. But now it starts to diversify. We are becoming an execution partners for other banks, other institutional clients, and they are using our brokerage services and our custody services. And this already represents or did represent in the first half 32% of our revenue. And of course, there, this also stabilizes a little bit the top line. I think it's important as a service provider that you have a good diversification of our client typology. And again here our bank status and the fact that we have been an early adopter of crypto technology. We have a very credible offer in Switzerland and abroad with our serious approach to crypto trading. We have a lot of additions to a lot of additional services that will come in the future. We are investing a lot in this sector because we believe in cryptos and we think that it will stay there for the longer term despite the bad news you get here and there, but it has become an asset class that is now accepted and acceptable by the entire world. Okay. About Swissquote. So we have a very competitive offering in Switzerland. So it's usually people don't realize, but we have 0 account management fee. So if you have an account and you have CHF 1,000 on it, then it would cost you 0. And also, the custody fees are capped. It's capped to CHF 50 per quarter. So that's a max of CHF 200 per year. And for these CHF 200 you can deposit 1,000,000 and 1,000,000 and 1,000,000. We will not charge you more. This is also a token of our success. If you look the also one of the reasons why we could onboard so much assets, €4,900,000,000 in the first half. This is also because we are absolutely not greedy on custody. Basically, with custody, we would like to cover our costs because we know that ultimately we will make our money with transaction. We are very aggressive on options and futures. There you can trade SoftBank 50. We have our lowest fee for funds and structured products starts at is at CHF 9, CHF flat. And then we have we can by package of trade and then you would pay flat fees of CHF 19 trade. So this number is obviously a little bit higher than our competitors that are offering deep discount brokerage. But when you consider the full service we are offering, the broadness of our financial instruments that you can trade, the fact that the custody is CHF200, then all in, it's a very competitive offer and this explains our growth and our successful business model. We have thematic thematic offering. These are so called AMCs. And you see here also that it has we have had a nice growth in the past. Now this all represents or the manager presents already NOK 440.6 million. We have still an objective to reach about NOK1 1,000,000,000. This will probably reach over the next one and a half year and now it's growing strongly. And we have realized that this is a very nice way of mixing our technology together with our financial skills. We have tens of different certificates, very successful. And it's a good product for starters that would open an account, but don't know exactly what type of products they should buy. However, they may have an idea. They may say Switzerland is a good place to invest. So by a Swiss tracker and then obviously they can go into the tracker, see what type of companies we are investing. And this gives him investment ideas, how to trade and where to trade. Very successful business model and will push this hard in the future. Here again. So we have the same type of charge for our other segments, the eforex business. Year also. You see that we have a nice growth here in the first half of twenty twenty one. We did more than €60,000,000 of revenues. We have we had volumes of NOK 746,000,000,000 in the first half. And here also there's a good mix between the retail business, B2C represents 64 percent, but we also are an equity provider to many partners and that represents 36%. What can you trade when you do ForEx? You can rate ForEx, obviously, FX. That's the biggest part, 49%. But we now are improving our CFD offering that represents 32%. And then we have a bunch of precious metal. Here also, part of the business is volume driven that's really linked with trade, but then we have also parts that is simple asset based animation swap revenues in the past and that represents an 18%. Now traditionally Swissquote has been a little bit weak when it comes to CFDs. And if the slides would like to pop up. Here it comes. So we are improving our offering on single stock CFDs. It was not a request in the past because we had such a broad range of direct equity investments. So why would you buy a CFD if you can buy the stock, but we realized that CFDs has a lot of advantages. We can invest smaller amounts and have the same effect. And slowly but surely, we're starting to increase our offering. We just added a handle 100 new single stock CFDs and there will be many, many more that we will add the to our system in the very, very near future. And we have an aggressive account fee structure where you could trade from if you have a prime account, you would only pay 0.09% of commission and also the standard trading account is very aggressive on prices. There's no surprise here. It's an international, very strongly competitive markets. And there, they just have to be in the markets to be able to gain clients. So you would see this type of fee structure almost the same all over the world. But again, there we have our big advantage is that we are a bank. So when you open an account and to trade ForEx with us. You have the security of Swiss banks and not trading with a dodgy ForEx broker. We have a serious and service offering and this is appreciated by our clients. Okay, let's go to the guidance 2021. So here, it has been announced in our press release. We aim to do EUR 465,000,000 of net revenues. That's 47% plus compared to 2020, where we had CHF317.3 million and then the operating the pretax profit will almost double, plus 99% to €210,000,000 from €105,600,000,000 in the past. And just look what happens over the last 2 years. This is a strong growth story, we almost doubled. And now the 2nd time in a row, we doubled the pretax profit. What will happen in 2022, well, the growth story will continue. Now we have all the clients we have acquired in the last 2 years and also because of the developments of our services, because of the developments of our companies abroad. We will also grow the top and bottom line in 2022. It's a little bit early to make a forecast. But I think as long as I can remember, this company has always experienced growth, end 2022 will not be different than the years in the past. But still, for the moment, we do appreciate incredible growth numbers, 100% growth for the 2nd year in a row is quite a performance. And because we are already in August, we can give a little bit a first taste of July. July, you see here that the pretax profit is at €14,100,000 Now July is traditionally the weakest months in the year because it's summertime. This year, we had the impact of the euro that was that so usually people are trading a little bit less, but still CHF14,100,000 in the weakest loans of the year is a very good numbers. And you can see also here that the growth is continuing. We had more than 5,500 new accounts in the same period. And they're also one thing that is quite amazing. We had €700,000,000 of net new money for the month of July. And at the end of the month, we increased the assets under custody again from over NOK 50,000,000,000 now to NOK 51,500,000,000. But obviously, the market helped a bit, but certainly the SEK 700,000,000 of net new monies was the biggest part of that asset growth. Okay. Now a look to our balance sheet and then will almost come to the end of this short presentation. So here we have total assets of SEK 8,600,000,000. They're also that's the highest number ever. And I already mentioned the total equity of EUR 544,000,000, amazing growth compared to 2020. Now where does the money come from? That's in big part due to customer. Here, you see that CHF 3,200,000,000 is Swiss francs. Then you have we have 2,100,000,000 and 1,300,000,000 euros and what are we doing with the cash? Well, unfortunately, not a lot. A big part of this is deposited with central banks. And because we have a trend or a tendency actually to be careful with our clients' deposits. We don't want to take any type of interest rates risk. We still believe that interest rates will go up now the that inflation is coming back a little bit. So we would not want to be tapped in long term investments at the very low investment rate. So we know that this has a cost currently, but it's the philosophy of the company. We for now are a little bit careful with our balance sheet and we hope to capture then a better interest rate in the future when interest rates will go up. So a very sound and solid balance sheet without any risks. We have loans. Obviously, here you see that the Lombard and the leasing increase from €551,000,000 to €744,000,000 But that's low risk business. Lombard because it's covered by securities deposited with us and leasing is related to the deal we're having with Tesla, which is growing nicely and also generates a nice return. Okay. Now last but not least, I have one slide I would like to mention. But first of all, the number of accounts since the launch, that's now more than 20,000. It's growing. It's going on a daily rate. We are already with that the 2nd largest provider in Switzerland, and I think will soon become the largest provider of NeoBank services in Switzerland together with our partnership with Post Finance and also to mention that the 20,000 clients or 20,000 accounts we have here are not counted with our other accounts that we mentioned earlier in the press release. So that's 20,000 on top. We didn't we do not account them even though they are we offering banking and custody services to our joint venture partner you, but it's a different type of accounts. Here, the average deposit is high. Renault Bank, it's CHF2,170 precisely. It had a very good start. It's a super attractive business. It's we have a very good offering and maybe you are already new clients and then you can experience the attractiveness of our offering. And then also if you are trading, you get Swisscoins. And Swisscoins, this is the token we have created together with Post Finance. It's a very interesting system. It creates loyalty end ultimately, because we are paying back into the treasury account of Swissquote, ultimately, people will make money with the coins they get when they open an account and when they trade. Okay. So I think this comes to the coming slowly coming to the end of our presentation. We have a very active Investor Relation program for the next months. We are in at Investora in September in Zurich. Then we also are in Munich at the small debater, small cap day in November. We have a roadshow with Zettkebe at the Swiss Equity Forum. And then we are you can meet us at the Credit Suisse Equity Forum on November 16. And next time, we have our yearly figures that will be in March 2022 when we will present our yearly figures and then also give forecast for then 2022 and an outlook what will happen 3 years later in 2025. Okay. So this concludes my presentation. Thank you to the to your participation today. We have 77 participants that joined us for the press conference this morning. So again, we'll go into some Q and A. To keep it working, we would like I would like to ask to raise your hand through the Zoom system. You go into settings or into the more, and then you have function where it says raise your hands and then we will see you and then we will be able to pass you the award so you can ask your questions. Please don't forget to unmute when you ask the question so that we can hear you. Okay, let's try this. So who has a question? Hello. Can you hear me? Andreas Brunn from Credit Suisse. Hello. Yes. Items. Okay. Hi. Thanks for the presentation. I would like to start with 3 questions. First, In E Forex, I saw that the number of clients decreased by 24%, but traded volumes actually are On an all time high. Could you give us some color there? That's the first one. And then on growth abroad, Some investors are worried sometimes about, especially flat tax with their strategy, trying to grab some market share in Switzerland. But you guys as the market leaders in Switzerland, how do you react? Do you think your pricing is competitive spin off. And then the last question on growth abroad on slide 10, We see you showed us that strong increase from growth of international revenues. I saw that the share of Swiss domestic decreased versus 2020, We chose that growth of non Swiss customers. But at the same time, the share of Middle East and Europe decreased as well like from 5% last year to 4%. Could you Like or how do you see that growth outside of Switzerland in that context? Thank you. Okay, thank you very much. Three very interesting questions. So first of all, the easiest one, this is E ForEx. Yes, the we do a little bit of cleanup. Sometimes the eforex business is really different from the equity business, we do not count small accounts or inactive accounts. And what is happening with E Forex is that you are active over a certain period of time and then you are less active and then you may become active again. So that's the nature of that business. And this is why I wouldn't concentrate too much on those accounts. It is we are also charging inactivity fees on those accounts because keeping these accounts open has a cost contrary to a trading account where we keep the clients for life. When it comes to eforex, we expect the clients to trade because otherwise it has a cost a strong cost impact on the organization. And there from time to times we are suspending or closing the accounts when there is only a few Swiss francs on it. So this is the reason why you would see this fluctuation in number of clients. But as you mentioned it, the most important number there is the generated volume with the active clients. So to answer precisely to your question, we only do account for active, active clients. Then yes, Ocus, it's a highly competitive market in Europe, as you know, with many different type of service offering. We do not want to compete in the lower segment. You mentioned flat decks, and there are others in the same range, let's say, in the with very low transaction fees, but it's a choice. We have made the choice of offering a very broad service. This is probably also a little bit of Swiss heritage in a way. When we started the company many years ago, in the beginning, we only offered the Swiss Exchange, so 6 in the beginning and a few 100 securities. And then it didn't last 2 days before the client say, well, that's great, but I would like to trade U. S. Stocks, I would like to deposit my funds with you. I have a fixed income product somewhere that you would like to consolidate with your bank. So that's a little bit the nature of our Swiss origin and we decided that this is our business model to have a broad range of service, quality customer, customer support and also custody bank that is able to deal with all those different securities. Now this is not the case for our competitors in the low segment, in the deep discount. By nature, you have to concentrate on the smaller number of security. And also probably if you divide the number of assets by the number of clients, you would see that these are much smaller accounts, not the one we have where we have deposits on average over CHF 100,000. So this is it's actually it's a choice of business model. Now we also have an offering for the, let's say, the more aggressive pricing model, but that's we think the market is going towards 100% mobile. This is the neobank offering. Therefore now we have a limited range of securities, but the idea there is to increase that a lot to offer very cheap costs on execution, so to be able to compete against the neobanks and the flat decks and the like. Then you had questions on Slide 10. Well, yes, it is only percentage. So that's and especially when there was such a high number, it's difficult to compare percentage with percentage. Obviously, the business in the Middle East did not grow in the same magnitude than our business in Switzerland did. This is why percentage wise, it's a little bit slower. But in absolute numbers, we had growth all over the place. So the it's just this amazing business we had in Switzerland that is pushing percentage wise the other locations a little bit down. Okay, perfect. We'll come back with more, but we'll let Arthur speak as well. Thank you. Yes, yes. And then it's good that you mentioned it. So we are, Yvonne and myself, we are available for any questions you may have. You can also call us later directly. We are here for you. Mr. So that's Mr. Nicolas Berkey from Mirabeau. Good morning. Thank you for the meeting. Congratulations for your success. That's really beautiful. So You're in the very enviable position of having exponential clients, exponential revenues. So my bit broad question is How do you strategically do to at the same time have quality support To your clients continue to be the same or improve while at the same time containing costs To avoid having exponential costs because as you said it's some costs are highly correlated to the number of accounts or clients. Some are more variables, but I guess you want to have in the years to come Some margin in order not to have a negative a too negative operating leverage in case clients Less active or even withdraw assets. So how do you solve this equation strategically? Thank you very much. Yes, well, that's a tough question. And it is difficult, I have to admit. And you and also, we didn't we don't always succeed in the first half. With making we have made headlines because people were complaining that they have to wait sometimes weeks before the account opening is actually processed. And then when you have to wait weeks, then what you do, you take your phone and you give us a call and then you realize that you're in the waiting of the telephone and then you have to wait 30 minutes before getting an answer. It was a very tough moment for us. We worked really hard to clear to clean and clear the backlog. And it's exactly what you said. You have to be the type of business in which we are is about having the cost under control. But at the same time, we want to offer a super good service. So this is the fine tuning of the management of the company. We have hired a lot of people. We are now 904, but the growth was even stronger than that. But we have to do it carefully, manage the cost at the same times when growth is there, but not overdoing it because volatility may come down a little bit and we don't want to be stock in fixed cost and then have a negative impact on our profitability. So it's fine tune management of the company. That's what we are doing. And then also technology is helping a lot. Now we realize that more and more people are not calling any longer. They are consuming the service on mobile phones. So they are dealing with us on the on with different tools. They are going into chat modes. They are sending requests online. So it's easier to handle this type flow than just having a call center agent on the telephone. So there's also a shift in the way actually you are using our customer care services and we can serve these at the cheaper price. We also have installed robots. Now when you ask questions on the chat system, you may well be served by a robot and then only pass over to a human being once the questions comes a little bit more complicated. So we're trying to deal with that. But as you said, it's not an easy task. Thank you very much. Thank you. Next question is from Ronnen. Yes, sir. Good morning. Good morning all and thank you very much. So I would like to start with On Slide 8. Marc, you mentioned in the presentation that this is a little bit the same picture as you see it every year. So I do not fully agree because, I mean, the growth we have seen in net new money in Asia is quite Standing. I mean, I've just checked with full year 2020. Full year 2020 was SEK 747,000,000 and now we are up at SEK 1,400,000,000 In H1. So I do believe it's very good news to see a shift out of Switzerland into New regions like Asia Pacific. Also Europe is up. Middle East seems to be quite tough. But nevertheless, I mean, do I do the right reading here on Slide 8? Then On Slide 26. Well, I mean, it's not fair. I mean, you have increased your guidance from €130,000,000 to €210,000,000 But now if I do a rough calculation, you have €1,000,000 34,000,000 H1 plus 14,000,000 in July. We want to achieve 210,000,000 So if I Divide the remaining €61,000,000 by 5 months, that's roughly €12,000,000,000 per month. So I mean, Looks not very ambitious. I know it's not fair, but nevertheless enough. Fair enough. And then in this context, perhaps, Any word on that 2024 guidance or will you then next year give a 2025 guidance? Then the next one, just a confirmation on Slide 18. Because I used to be with the number of trades per client per year. Now I did a rough calculation. Is it right that you've seen like 16 trades per client per year in H1 'twenty one versus 14 in H220, which would go hand in hand that your new clients are active traders just here, 2016 versus 14. And now the last question On Slide 4, I don't know if there's an English word, but I call it conversion rate from Opening requests to opening accounts, right? So interestingly, In H1, this conversion rate was like 42%. And if I'm looking At July on Slide 26, here the conversion rate was 67%. So I'm wondering, is there kind of a time lag in the year between opening requests and opening accounts? Thank you. Thank you, Rene. That's all good, all good questions. I knew that would multiply the 3 pack by 6. I'm not surprised. I website. I had a I was a very young entrepreneur and I had a meeting in London with a portfolio manager and he told me, Marc, you should only give numbers that you are sure you can match and overachieve. And I learned that lesson very strongly. So too, we are a little bit conservative in our numbers, and especially when we say it was the weakest months in the year, then obviously, there was a problem. But we like to be conservative in our figures. We think that doubling the pretax profit is already the a nice guidance. It's markets are unpredictable, so we may have the slowdown, but it's difficult to forecast. So that's truly we have been a little bit conservative for the second half in our forecast. Guest well spotted. Then about the number, yes, it's the we have been overwhelmed with account openings. We had difficulties in handling all those numbers because suddenly it's like you open the gate and the it's coming like crazy. I think the crypto hype also helped a lot. So we but at the same time, we had to refuse a certain number of clients simply because they did not match our requirements for Swiss Banking accounts. But we have a backlog. And the reason why suddenly you see 5,500 accounts openings with 8,200 opening request is because we opened also accounts where the request was made in May June. So we still have a backlog. We still are struggling with opening the accounts because we have to document the accounts. Now we can't we're not in a position where we can open an account in 2 hours. The that's not possible. So we have to deal with the fact that we are a Swiss bank and this and there is a little bit of cost of that and sometimes we're losing clients because we can't open the account fast enough. But that's okay. We can live with that. Then let's go back to the various slides you mentioned. Conversion rates. I think we've touched that, right? Yes. Slide 8. Yes, there is a group and maybe the Yvonne is just sitting next to me. So he has some good explanation as always. Hi, Rene. Hi. CFO. Perhaps there's more comment on the question that Marc just answered. I think you know that there is a backlog, but it's not necessarily on Swissquote side. We have an application process, but sometimes the profiles of customers is a bit more complex. You see they're more wealthy. So sometimes there is a back and forth process. If the customer is the CFO of a listed company, somewhere we may have 2 or more questions. And It may take, on his side, a few weeks to come back to us. So some accounts are in progress, not because there is Non constructive backlog at Swissquote, but we're getting more and more sophisticated customers than have in other banks. It may take a bit longer. We always know that high profiles are a bit more complex too often. So this is why I think the conversion rate is in line with historical metrics, but the files could be sometimes a bit more sophisticated. This good news, but then there is some time to wait. On Slide 8, yes. No, I think we had this target to have 50% of net human is coming from Switzerland, 50% coming from customers' domicile outside Switzerland. So We're moving in that direction. Last year, I have to say as well, COVID-nineteen impacted a little bit the development of our international And Cittend over performed in a certain way. So this is why now we know we're returning back to what was the objective of tip of management. But yes, I think in the future, the growth should come of net earnings back with a good mix, 50% Switzerland, 50% international operations. And then was there another slide, a last one that's one we forgot? Just this number of trades, which you used to report in good old days, but now you're just giving the total number. So is it 16 versus 14? Yes. Yes, that's true. That's true. It is it was an amazing time. And but this is all mixed. It's also including crypto. And you trade crypto in a very different way than you trade securities. You go in and out in the same day. So that pushed the number, obviously. Yes. So I will not bother you with 'twenty four outlook, We should all have opened. Thank you very much. Thank you very much, Frode. And you can always bother us a little bit later on the phone. Okay, Mr. Thomas Pol? Yes. Hello. I was just wondering if you could explain me A little bit the trading income, why this is boosted so much? What is In there, is this your own holdings? Do you how it may be even crypto yourself? And the second question would be a bit about you. And you mentioned you were already the 2nd largest neobank. Who is the largest? And with What number of clients will you be will you make a profit with you? Do you have some business plan there? Yes, I take the last one and then Yvonne will take the first question. So well, it's maybe exaggerated a little bit and be the 3rd largest because we have Credit Suisse in between. So I think the market leader today in Switzerland is NEON. And then you have Credit Suisse, CS6, according to their own numbers. So the we can't control that, but we have to trust them and then comes you. However, if you see the dynamic of the dynamics. CS6 started months ago, and they claim to have 40,000 clients. And we, in a few weeks, we are 20,000 clients, bid continues. So I think we will soon become the market leader, and we only count active accounts. That's also maybe something that we don't know with our competitors, but we do only account for active clients. We have high ambitions for the end of the year. We want to more than double this number. We would like to be around 50,000 clients other targets. And then profitability will not be far away when we have reached this type of now the thing is that this is an investment case. So the application is quite nice today, but there are many, many more things that we want to develop together with our partner. Now the it is the beginning of a longer story. For now, we did the obvious, which is credit cards, which is saving, investments, but there's many, many more things we can do, and we have a lot of good ideas. But we what is important to say here is that we are in the lucky positions where we are investing in the company, but attempt at the same times we are offering services to the company. So from a P and L perspective in 2021, this will have no impact on so the costs of the investments is compensated by the revenue of the service with rendering to the joint venture. And for the first question So you are kind of speaking. So it's true that trading income increase compared to, for example, second half year last year by 7%. This is, as you did spot, this is because There was an increased trading activity across all asset classes. So when the Swiss customer with Swiss franc does the transaction, It could be that the asset acquired is designated in another currency. So it does generate, on top of the brokerage commission, an FX margin for the bank. Same on the crypto asset class, fixed income. So it's really when customers no, they acquired the trade, they buy or sell a security that is not designated in the same currency as their deposit. So we have here an interesting margin that comes on top of the brokerage commission. Okay. Thank you. Swissinfo. Swissinfo. Yes. Matthew Allen from Swissinfo. I've got a quick question relating to your crypto business. In one of the slides you say you're going to get into the lending, staking and exchange side of That business. I wonder if you could put any more meat on the bone there as to when and how you're planning to do that? And Particularly with the exchange, does this mean you're going to be applying for the new DLT trading license? It's just being introduced by FINMA at the beginning of this month. Okay. Okay. Well, do you do the last ones? No, we don't need because we are a bank, so we have all the licenses we already have. So for now, we are basically a broker in when dealing with crypto, meaning that we have exchanges on the other side, and we are interlinking the trade of our clients and then we see execution on the change. But that's the that was the initial phase of our development. We have first of all, we have many clients, so we can hedge them internally as a start. And then also, we can accumulate the liquidity from various places, so to offer a better execution service to our clients. In that sense, we will then become an exchange. And this is big developments we are doing. We are almost ready to for that. And the other will come in 2021. So we have an entire team dedicated 2 days. Okay. Thanks. Thanks very much. Thank you. Mr. Manuel Hetor. Yes. Hi. Hello. Can you hear me? Very good. Perfect. Thank you very much for taking my question and also congratulations to the very good result. I have only one question regarding risk. What is the average leverage your customers have with you? And probably also what is the maximum leverage you offer to clients in FX and crypto trading? Thank you very much. Okay. So no leverage with crypto trading, because we don't think we should do it. And then when it comes to ForEx, dividend a little bit where the client is booked. If the client is booked in Europe, then obviously, we follow the ESMA rules, which is where the leverage capped at 30. And in Switzerland, there is no cap, regulatory cap on the leverage. But however, we have an internal limit at 100. And then we have a question from Kepler Cheuvreux. Hello, can you hear me? Yes? Yes. Good morning. Good morning. Thank you for your presentation. I have a question. Well, you say that you were aiming for growth in 2022, top line and bottom line. There's something I don't get. I mean, when I see you, I mean, your guidance, I understand that you're conservative for H2, but that means that's Your guidance suggests that you will make something like €75,000,000 if I'm not mistaken, €75,000,000 pre tax profit in H2. I don't know, just if I extrapolate this €75,000,000 next two half of twenty twenty two, I get to 150. So it would be below 2021. I don't know if I'm wrong thinking like this, but do you have any Yes, okay. So well, there's 2 answers to your questions. The first one is the second half has always been historically lower in our history. I don't know why this is probably there is the summer and then basically the holiday season at year end that is lowering a little bit the revenue in the second so you shouldn't take the second half as a forecast for the entire year 2022. As we mentioned earlier, we are a little bit conservative in our approach anyway. But we also invested a lot. We have our operations in Luxembourg that is now getting some more steam. We have as you know, we have acquired this bank and we have transformed the business model and we are pushing the on the growth side. And you have a little bit the same story in Singapore, in our different locations. So we are we know that year after year, we are increasing our business and we would this will also will happen in 2022. Simple out of growth from all the clients we will acquire in 2021 and that will be sitting on our revenue line in 2022. Okay. Thank you very much. Thank you. Mr. Stephanie Deans. Stephanie Deans, yes. Congratulations on your results and good morning. I just had a quick Well, I had a few questions. Just relating to the You partnership with Post Finance. You were saying that the cost of investment in this is mainly sort of compensated by the revenue you'll get from the partnership. And I was just wondering, do you have any Estimates, I know it's still probably early days, of the effect that this could have on the business and any other partnerships that you sort of have in mind going forward. Following from that, I think globally we've seen quite a dramatic increase in Q1 of 2020 in trading For retail investors generally, what kind of gives you the impression that this market acceleration on trading platforms will continue organically, same Sort of growth rate? And then lastly, sort of as you said in your presentation, you kind of pride yourself in being a tech powerhouse. This is purely out of curiosity. Do you think that there's any relationship between users using your platform, say in a trial account and then conversion into trading? Or is it mainly users who come with already some trading background and would like to just use the services that they're familiar with? Thank you. Okay. Yes, for the last question, we see a little bit of shift in financial knowledge between the clients we had a few years ago and the one we have now. This is also one of the reasons why we struggled a little bit with our customer care because on average they're spending more time with them because they have different questions about financial products. So there is truly a new generation of clients coming to us and learning financial products. So it's I think it's I'm not sure whether it is because they are using demo accounts and then farming simply because it has become popular. And it's you can hardly open newspapers without speaking about cryptos, about financial products and it has become part of your early adult life to deal with financial products. The there really is a shift. And also the one reason why we developed this partnership with Spode Finance is that to have a good introductory product for NIO customers using NIO banks. And now obviously, when the clients a little bit more sophisticated. They want to have a broader service range and then they can use the classic e trading service from both partners. Then I can't remember the 2 other questions. The first one was, I think, was about you. Was it about some forecast about the impact on our business, right? Yes, yes, particularly for sort of New York Bank interested users Sort of relating to the crypto trends? And also, do you have any sort of future partnerships around this space in mind? Hi, Jean Carvan speaking. So I think for you, what so we have a mobile app that has been launched market. So this app was developed by Swissquote. So the cost or the vast majority of the costs are behind us. They were basically included in our 2020 figures. And then we made this partnership with Plus Finance to launch it in Swiss market. We think that we need to be successful in Switzerland in our domestic markets before contemplating to export this mobile have some more hands. Yes. So I think, yes, first, we need to observe how they have developed in the market here. Mr. Berkey, as As mentioned, an objective for the end of this year. And then I think if we are successful and we are convinced we can be successful, then We may contemplate other services. For this year, we don't expect the partnership to cost something despite we're really launching the product in the new market, so new product, new market. So there is some cost in terms of marketing and so on. But later on, this should contribute nicely to the profitability of Swissquote Group. Okay. Perfect. Thank you very much for your answers. Thank you. Thanks a lot. Okay. So we have 3 more questions. Andreas Gruen from Credit Suisse sorry, no, In the guidance. Do you excuse me, I'll I'll ask my question in English. Do you intend to review and upgrade your long term guidance for 2024, considering that the Free tax profit you were aiming initially is expected to be reached as of this year. Is it something that you plan to do To review the guidance, to update the guidance in the next 6 months, I would say. Yes, absolutely. So we announced at the beginning of the year that we will have €500,000 revenues in 2024 and then the profit margin to lead us to a pretax of €200,000,000 Now we did it earlier with the help of good markets, but also and this also explains why the margin is a little bit higher because by 2024, we will have a higher cost base. So we probably will not be able to sustain the same profit margin. Yes, sure, we have reached the in 2021, we have reached our forecast for 2024. So by the end of the year when we have the presentation of the yearly results, we press, we will give a 3 years outlook for, in this case, 2025. And then we have Andreas Bruhn from Credit Suisse. Just Quick follow-up. On like talking about profit margin, looking at your H2 guidance, one can calculate the pretax profit margin of 37%. Do you think that's a sustainable level for the short, medium term? Then secondly, also looking at H2 'twenty one guidance of €200,000,000 of revenues, where do you actually Expect the difference to come from versus H1. Is it coming mainly from crypto revenues or mainly seasonality? And around that topic, I would like to understand how sustainable your crypto revenues are. How much is kind of the average revenue contribution, for example, in July from crypto Trading or put like differently, what do you expect in a normalized half year from cryptos? Well, that's a tough question. And this is the reason why we have been a little bit careful for the second half because it's difficult to predict actually what the crypto markets will give us in a way. If you take the July figures, then out of the SEK14,000,000 out of the posted revenues, SEK3 1,000,000 is coming from crypto in July. So but that's a very low number. And it happens in a market where crypto was going sideways. Now if there is a little hiccup in crypto, then you would see this number explode and this going straight to bottom line. So that's probably a little bit the reason of our, let's say, more careful forecast for the second half is because we don't exactly know what how much cryptos will be traded and when it will be happening. It could well be possible that we do the exact same numbers in crypto revenue than in the first half. So that we would simply need to have more volatility coming back to this business segment, which you can absolutely not exclude. We may see the Bitcoin going back to 50,000, 60,000 within a few days, and then we are back there. So our forecast has been made taking into account that crypto trading will be very, let's say, boring for the second half. That's the explanation of our list, let's say, more careful forecast on the more careful outlook for the second half. What makes us also more positive, however, is that the number of clients trading crypto is increasing. The number of clients depositing cryptos from wallets to the bank is increasing as well. So the fundamentals of the business are increasing. And we believe we do believe in that market. So it's in the medium term and we're speaking about 2022, it will again be a substantial part of our revenue. But in the medium term, let's say, next 2, 3, 4 months, it's difficult to say exactly at what level we will be. And then there was a question about your the margin of 37%. Yes. Andre, it's Sylvain speaking. So the so in the first half, we had quite a very positive That margin of 50%. Our objective in the initial guidance was 35%, with an objective for 2024 to be at 40%. So it's true that we had 3 months ago an objective of 35. So the second half, Gerry, looks more in line. So we probably have made some accelerated progress here in the pretax margin, But it's certainly not the case that we could sustain 50% medium term. We had back margin objective of 40% medium term, and this is probably a more appropriate target medium term. We could be sooner at this pretax margin of 40%. 2nd Arcia is an example, 35.5%. Again, above initial target. But yes, this is what I can say. Probably, it's somewhere between 35% 40%. Perfect. Thank you very much. Okay. So with this, I think we've reached the time limit of our presentation this morning. So again, thank you very much for joining us. Thank you very much for your interesting questions. And this is highly appreciated. And yes, we, Ivan and myself, we're here. In case you have questions, don't hesitate to call us. And with that, I wish you a wonderful day and a great weekend and see you next time. Bye.