IG Group faces £30m bill after franc ructions
SPREADBETTING company IG group yesterday said it faced a bill of up to £30m because of last week’s “unprecedented” surge in the Swiss franc when the Swiss National Bank scrapped a cap on the currency.
The 30 per cent jump in the franc against the euro after SNP’s move last week cost currency traders millions of dollars and forex trading firm Alpari called 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 £12m of market exposure and £18m of client exposure – held by 327 customers.
“While this was due to an unprecedented and unforeseeable degree of movement in a major global currency, and only a few hundred clients were affected, we will seek to learn lessons from this incident which we can incorporate into our risk management approach,” IG said in a statement.
The London-listed stockbroking and trading group – the first and largest spreadbetting firm in the UK – said for the half year to 30 November, net trading turnover rose eight per cent to a record £197.4m, and pre-tax profit for the period rose 2.8 per cent to £101.4m.
Tim Howkins, group chief executive, said: “If full-year diluted earnings per share were to be lower than last year purely because of [the currency shifts], the board’s current intention would be to maintain the full-year ordinary dividend at last year’s level.”
IG shares ended up 1.9 per cent at 730.50p.