Vincent Germyns (pictured), chairman of the executive board, Binckbank, said the result for the first half of 2019 was lower than expected, with market conditions in which the broker conducts its business activities ‘very challenging’.

Dutch broker Binckbank has reported that sales of financial instruments including the Binck turbos and hedge accounting results, decreased by 35% to €2.5m in the first six months of 2019 (1H2018: €3.9m).

Requirements by regulators of maximum gearing allowed on leveraged products, such as turbos, also resulted in a ‘smaller product assortment’ and a ‘dampening effect’ on the earnings from these products, according to the online broker.

The transaction numbers for 1H2019, at five million, were in line with the comparable period last year. Due to the new price plan with a service fee and commission-free transactions in Binck turbos, the average revenue per transaction fell to €9.33 (1H2018: € 11.11).

Assets under management stood at €1 billion at the end of June 2019, with the new 'Laten Beleggen' propositions, were clients outsource their portfolio management to Binckbank, growing to €239m of AUM, due to net inflow and positive returns (1H2018: €142m).

The Dutch provider introduced a number of new underlyings in the first half of 2019, often at the request of clients, including turbos on Beyond Meat, Lyft, Takeaway.com, Uber, and Van Eck Vectors Gold Miners ETF.

Of the outstanding turbos, 375 are linked to the AEX, making it the most popular underlying, followed by Dax (302), Galapagos (301) and the EUR/USD currency pair.

Net commission income on Binck’s execution-only services, which decreased by 17% to € 46.1m compared to € 55.5m in the first half of 2018, was under pressure due to falling trading volumes, caused by market sentiment and volatility, and strong competition with more parties entering the market. The emergence of online brokers with a ‘zero fee’ commission model, which make use of other earnings models under non-Dutch legislation and regulations, poses a substantial threat to income from the trading segment, according to Binckbank.

The consolidated net result for 1H2019 amounted to € 6.6m, resulting in a net profit per share of €0.10. The net result was lower than the result for the same period last year (18H1: € 22.2 million, € 0.33 per share), however, in 1H2018, the result from the sale of Think ETF Asset Management amounting to € 8.1 million (€ 0.12 per share) was recognised.

Net interest income decreased by two percent compared to the first half of 2018 and amounted to €15.6m. The average outstanding balance of collateralised lending was lower over the first six months of the year and resulted in a drop in interest income. In 1H2019, the central treasury activities delivered on average a higher return, mainly from the USD bonds.

Compared to 1H2018, the total operating expenses over 1H2019 decreased by three percent from €57.1m to €55.6m.

Binckbank’s total equity amounted to €410.2m at June 30 2019 (Full year 2018: €403.4m; Half year 2018: €398.7m).

Click the link to view the full Binckbank half-year 2019 report.