Trading 212 Group reported a decline in profit for 2023 due to rising expenses
Trading 212 Group reported a decline in profit for 2023 due to rising expenses
Trading 212, the popular online broker, reported revenue growth in 2023, reaching £116.2 million compared to £114.9 million the previous year, marking a 1% increase. However, the company’s profitability was impacted by a sharp rise in operating expenses, with net profit falling by 35% from £34.2 million in 2022 to £22.
The report highlighted that a key driver of revenue growth was Trading 212’s interest income, which rose to £15 million in 2023, a significant jump from just £0.4 million in 2022. This increase can be attributed to higher interest rates that boosted returns on uninvested cash. Nevertheless, rising costs, particularly in advertising and staffing, significantly affected net profit. The brokerage more than doubled its advertising expenditure to £27.1 million in 2023, up from £13.1 million in 2022, underscoring its focus on expanding market presence.
Owned by Bulgarian entrepreneurs Borislav Nedyalkov and Ivan Ashminov and led by CEO Mukid Chowdhury in London, Trading 212 also disclosed key client asset figures. As of December 31, 2023, the balance of client funds in segregated bank accounts was £438.6 million, up from £306.7 million in 2022. The total value of client assets reached £3.36 billion, up from £2.08 billion the previous year, indicating increased investor engagement and portfolio growth on the platform.
Expanding its footprint in Europe, Trading 212 acquired German CFD broker FXFlat. The acquisition, completed in two stages in 2023, cost €4 million, with an initial 10% stake acquired for €385,012 and the remaining 90% for €3.604 million. This strategic move underscores Trading 212’s commitment to strengthening its European presence.
While the brokerage operates both an exchange-traded platform and a CFD platform, its primary growth strategy remains focused on exchange-traded products. The popularity of the T212 platform is driven by features such as zero-commission pricing, fractional share trading, and mobile access, attracting tech-savvy and cost-conscious investors.
In line with its client-centric approach, Trading 212 introduced two initiatives in 2023 aimed at boosting investor returns. In June, the company began sharing interest on uninvested cash with clients, followed by the launch of a fully secured stock lending program, allowing clients to earn additional income. Both initiatives have been well-received, fostering user engagement and supporting steady client growth.
Looking forward, Trading 212 plans to expand its product range and introduce new tools to help retail investors access broader financial markets and strengthen their financial independence.
Read also: Exness announces expansion of its Team Pro program
