After experiencing record-breaking years, Trading 212‘s UK subsidiary faced a slowdown in revenue growth and profits in 2023.
The brokerage operator reported a 3 percent decline in revenue and a 28 percent drop in pre-tax profits for the year.
According to the latest Companies House filing, Trading 212 UK Limited’s 2023 revenue was £95.3 million, with a pre-tax profit of £38.6 million, down from £50.9 million the previous year.
The net profit after taxes was £30.4 million, compared to £41.1 million in 2022.
Despite the declining figures, the company noted that 2023 marked “a continued stabilisation in the revenue following on from the exponential growth seen between 2019 and 2021.”
The UK company significantly benefited from higher interest rates, generating about £14.8 million from interest income, a substantial increase from £451,994 in the previous year.
However, the company’s profits were impacted by increased administrative expenses, which climbed 45 percent to £71.2 million due to heightened marketing activities.
The company resumed its marketing efforts in the last quarter of 2022 and spent over £7.4 million on research and development.
Trading 212, established in Bulgaria in 2004 as Avus Capital and incorporated in the UK in 2013, primarily focuses on the UK and the European Union.
It operates through three entities: one in the UK and two in Cyprus and Bulgaria.
The group has yet to release 2023 figures from its non-UK businesses.
The broker is shifting its focus from contracts for differences (CFDs) to stockbroking.
“While operating both a stockbroking and CFD platform, T212’s growth strategy remains focused on the stockbroking part of the business and growing the value of client money and client asset balances,” the filing noted.
Trading 212 highlighted several improvements in non-financial metrics: the number of monthly active users increased by 28 percent, and monthly trades rose by 32 percent.
The total value of client deposits and client monies jumped by 22 percent and 37 percent, respectively, with client custody assets increasing by 55 percent.
The broker is also expanding its products and services.
It recently launched a multi-currency payment card for its UK customers and introduced interest on uninvested cash, alongside a stock lending program.
“T212 continues to review new product ideas such that it can further contribute and support the investing public in gaining access to the wider financial markets and enabling them to take control of their financial undertakings, investment portfolios, and ultimately to build wealth for their futures,” the broker added.