eToro UK Registers a 13% Growth in Net Profit for 2022

As a result of significant cost-cutting measures, eToro's UK branch managed to achieve a higher net profit of $3.43 million in 2022. This was achieved despite the fact that its net income nearly halved and trading commissions reduced nearly threefold compared to the previous year. At the same time, the company managed to secure 100,000 newly funded UK accounts.

In recent weeks, many UK financial firms have reported results for 2022 with the usual pattern: higher revenues but lower profits due to higher operating costs. But eToro UK reversed this trend. Despite reduced retail trading activity, which negatively impacted trading commission revenues,  eToro UK maintained profitability and improved its performance. 

The company's 2022 report shows a decline of nearly 60% in trading commissions, from $307.87 million reported in 2021 to $131.32 million last year. "The fall in revenue can be attributed to a significant reduction in trading activity across the year, particularly in crypto," the company commented. In response to the crypto downturn, eToro expanded its presence in the EU and obtained a CySEC digital asset license.

The company's trading costs dropped significantly from $61.1 million to $2.32 million. Administrative and operating costs also fell by 45%, from $257.97 million to $139.92 million. "The UK business was required to streamline certain activities and cut costs in 2022, and as a result, operating expenses fell 46%," eToro UK added.

Nonetheless, operating profit remained well below the 2021 result, falling from $6.22 million to $3.84 million. However, eToro UK's interest income rose sharply from $112,969 to over $3.56 million, a surge of 3,000%. As a result, the net profit for 2022 came in at $3.43 million, up 13% from $3.03 million reported in 2021.

eToro UK also reported that it managed to secure almost 100,000 newly funded UK accounts in 2022 despite a significant drop in retail trading activity. The entire eToro Group also attracted new customers, ending the year with nearly 31 million registered investors and 2.8 million funded accounts worldwide. This represents a 16% increase compared to 2021.

(Source: Finance Magnates)