Swiss online banking group, Swissquote, has benefited greatly from the addition of cryptocurrency investing to the set of services it offers, reporting a significant increase in its H1 2018 profits. The news comes while Switzerland is debating over how to keep crypto businesses in the country when the majority of Swiss banks refuse to provide services to the growing crypto sector.
Swissquote Posts Profit of 25.7 Million Francs in H1 2018
While many traditional financial institutions in Switzerland are still shying away from dealing in cryptocurrencies and working with crypto companies, those who have ventured into the space are already harvesting the fruits of their decisions. Swiss online banking firm, Swissquote, has reported soaring profits attributed largely to the offering of investing opportunities related to cryptocurrencies like Bitcoin, and a steep rise in both the number of customers and the volume of trading.
Swissquote Group posted a profit of 25.7 million CHF (~$26.1million USD) from the first half of this year, which represents an increase of 44 percent over the same period of the previous year, the local outlet Finews reported, quoting an announcement released by the company on Tuesday. The profit margin exceeds the predictions of financial experts by about 2.5 million CHF (~$2.52 million). They expected a profit of 23.2 million Swiss francs.
At the same time, the number of customer accounts in the commercial sector has increased by 16,278. The same trend is valid for the activity of the clients, too. According to the report, Swissquote clients have made an average of 11.8 transactions in the first half of 2018, compared to only one transaction during the same period of 2017.
The cited data shows that client assets have increased by about 20 percent to 25.5 billion CHF (~$25.2 billion) as of mid-2018. Net new money inflows were also up — by 60 percent over the previous year, at 2.4 billion CHF (~$2.42 billion). Swissquote also said it expects both income and profit for the whole year to increase by about 15 percent. The company has benefited from the high demand for crypto products earlier this year which is not expected in H2, despite the recent market gains.
Swiss Financial Institutions Slowly Opening Up to Crypto
Swissquote has been hailed by many in the crypto industry as the first European online bank to launch and offer Bitcoin services to its clients. Last summer, it partnered with Bitstamp to add Bitcoin core (BTC) to its online trading platform in pairs against both EUR and USD. In December, Swissquote added Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
Swissquote is not the only financial company from the Alpine nation to take advantage of the great potential for growth in the crypto space. In July, last year, Switzerland-based private bank Falcon announced its decision to offer Bitcoin asset management and other crypto-related products to its clients through a partnership with Bitcoin Suisse AG.
This past July, Switzerland’s main stock exchange, SIX Swiss Exchange, said it is building a platform for trading, settlement, and custody of digital assets. And in June, one of the country’s oldest legacy banks, Hypothekarbank Lenzburg, announced it is accepting crypto businesses as account holders. Two other banks, Neuchâtel Cantonal Bank and Neue Helvetische Bank, are also working with blockchain and crypto firms.
Nevertheless, the number of legacy financial institutions in Switzerland which have so far declared readiness to offer services to the hundreds of startups in the Swiss Crypto Valley remains limited. The restricted access the traditional financial system has been recognized as a major threat for Switzerland’s leadership in the European crypto space where destinations like Malta and Gibraltar are also competing for attention.
Zug-based companies are complaining about the inaccessibility of local banking services and many of them have been opening accounts in neighboring Liechtenstein, for example, where banks like Frick and Alpinum are working with Swiss startups. Authorities in Switzerland are now considering ways to grant crypto businesses access to banking services in the country.