saxo-bank-annual-report-2015

MANAGEMENT REPORT
Saxo Bank Group reported a net loss of DKK 645 million
for 2015 compared to a net profit of DKK 381 million for
2014. By the end of 2015 Client’s collateral deposits had
increased by DKK 9.4 billion to DKK 77.6 billion, which is
a new all-time high.
The Board of Directors and the Board of Management
find the result for the year unsatisfactory. However the
Board of Directors and Board of Management notes that
the result is heavily affected by the effects of the decision
made by the Swiss National Bank on January 15, where
the fixed floor between Euro and the Swiss franc was removed.
Despite Saxo Banks warning about growing risk in CHF
trades in September 2014, no one could have foreseen
the historic movement. As a result a number of Saxo
Bank’s clients ended up with insufficient margin collateral
to cover their losses on positions in Swiss franc. Where clients
have unsettled negative balances end of 2015 these
balances have been fully provided for which has resulted
in significant credit value adjustments for the year.
The net loss for the Bank related to the Swiss event
amounts to approximately DKK 0.7 billion and have been
included in the result for the period. The collection process
concerning the unsettled negative balances will continue
and further coverage from clients will have a positive
impact on the Bank’s future result.
The inflow of clients’ collateral and new clients continued
successfully in 2015, but in the aftermath of the Swiss
event with cautiousness and the uncertainty concerning
China and thus the global economy continued as well
throughout 2015. Trading activities in 2015 have been
lower than expected even though volatility has increased
compared to 2014.
Operating income decreased mostly due to the Swiss
event from DKK 3.0 billion in 2014 to DKK 2.1 billion.
Cost has been impacted by the increase of staff in the last
two years as well as restructuring. Staff costs and administrative
expenses of DKK 2.3 billion were therefore 14%
above the 2014 expenses.
KEY FIGURES AND RATIOS · SAXO BANK GROUP
(DKK million) 2015 1) 2014 2013 2012 2011
Operating income 2,126.7 3,006.8 2,861.0 2,966.4 3,526.9
EBITDA 2) (109.4) 1,099.0 898.0 605.9 1,155.6
Profit before tax (778.4) 564.8 247.4 152.0 847.9
Net profit (644.6) 381.2 162.2 80.9 617.8
Total equity 3,938.4 4,225.2 3,492.7 3,364.5 3,240.0
Total assets 33,501.6 36,008.3 27,746.2 25,623.2 27,018.2
Clients’ collateral deposits 77,568.0 68,227.2 50,644.0 40,199.0 35,275.3
Assets under management (Wealth management) 14,227.0 14,101.9 12,845.9 14,633.8 12,240.0
Total capital ratio 20.7% 19.7% 16.2% 13.5% 14.5%
Return on equity before tax (19.1)% 14.6% 7.2% 4.6% 27.7%
Average number of employees 1,494 1,456 1,362 1,522 1,413
1)
Please note that the numbers for 2015 all includes the effect of the Swiss event.
2)
Net profit before tax, depreciation, amortisation, income from associates and and non-trading related interest expenses etc.
See definitions in Saxo Bank’s Annual Report 2015 page 109.
SAXO BANK · ANNUAL REPORT 2015 · 5