IG Group confirms 30 million pound hit from franc gyrations
By Richa Naidu
(Reuters) - Online trading company IG Group Holdings Plc confirmed on Tuesday it faced a bill of up to 30 million pounds ($45 million) due to an "unprecedented" surge in the Swiss franc when the Swiss National Bank scrapped a cap on the currency.
The 30 percent jump in the franc versus the euro after the central bank's move last week cost currency traders millions of dollars and forced currency trading firm Alpari (UK) Ltd to call in administrators on Monday.
IG said its losses from the sharp climb in the franc and a lack of market liquidity came from a combination of 12 million pounds of market exposure and 18 million pounds of client exposure, confirming a tally it gave last week.
The company has been suggested as a potential buyer for Alpari assets and a person familiar with the matter said on Monday it could be interested at the right price.
However, an analyst questioned the value of Alpari assets to IG.
"IG may not be interested because they may already have relationship with a very large number of its customers," Numis Securities analyst James Hamilton said.
Despite the loss, IG, an online stockbroking and trading company aimed at retail clients, said the highly unusual event would not, in itself, change its dividend for the full year.
In its results, IG said it would meet full-year revenue expectations, as it reported a 2.8 percent higher first-half pretax profit and said it would pay out an interim dividend of 8.45 pence per share.
The dividend is up 47 percent from last year's interim payout of 5.75 pence per share.
IG's full-year revenue is currently forecast at 378.32 million pounds, while pretax profit is seen at 192.97 million pounds according to Thomson Reuters I/B/E/S.
The company offers spread betting and allows clients to trade financial derivatives like contracts for difference. It's shares rose 0.4 percent to 98.24 pence in early trading in London on Tuesday.
(Reporting by Richa Naidu in Bengaluru; Editing by Rodney Joyce)
