January 21, 2020 / 7:35 AM / 7 months ago

IG Group's profit falls 10% as tighter regulations weigh

FILE PHOTO: Dealers work on the IG Group trading floor in London, Britain June 30, 2015. REUTERS/Neil Hall

(Reuters) - British online trading platform IG Group Holdings (IGG.L) said on Tuesday its first-half profit fell 10% as it struggled with stricter regulations in Europe and Britain that curbed trading in certain risky products.

The company said its pretax profit fell to 101.2 million pounds ($131.59 million) in the six months ended Nov. 30 from 113 million pounds a year earlier.

IG and its rivals Plus500 (PLUSP.L) and CMC Markets (CMCX.L) have faced an erosion of their client-base after regulators in Europe and Britain tightened rules on products that allow anyone with a bank card to make highly leveraged bets in financial markets through apps and online platforms.

However, recent updates from IG’s peers have indicated that clients are adjusting to the changes, while an improvement in U.S.-China trade relations and Brexit-related developments have spurred more traders to bet on the market.

“Early indications are very encouraging, with continued growth in the client base in our core markets and convincing progress in the areas identified as significant opportunities,” IG’s Chief Executive Officer June Felix said.

The company, which started off as the world’s first spread-betting firm, said it continues to expect to return to revenue growth in full-year 2020 and maintained its dividend for the year.

The group’s net trading revenue for the first-half was 249.9 million pounds, compared with 251 million pounds a year earlier.

IG, which allows individuals and other non-institutional retail investors to bet on stock, currency and oil market moves, also said Chief Financial Officer Paul Mainwaring will retire.

Mainwaring was initially appointed CFO-designate in 2016. The company has started the process of looking for a successor.

Reporting by Safia Infant in Bengaluru; editing by Uttaresh.V

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