Euronext FX trading revenue drops to €6.3 million

Euronext has reported an 11.7% year-over-year drop in the revenue derived from forex trading activities during the first quarter of 2023. The pan-European stock exchange group revealed this drop on Tuesday after submitting its latest report on the financial performance.

Euronext FX trading revenue drops

The FX revenue figure that was reported by the pan-European stock exchange group during the period came in at €6.3 million. The amount was not only an annual decline but also a 6% decline compared to the last quarter of 2022.

This decline also comes as Euronext FX, the electronic communication network for forex trading, reported a 13% drop in the spot FX volume. The total trading volumes also declined to $1.4 trillion, with the average daily volumes dropping to 14.4% to $21 billion.

Besides these asset classes, Euronext revealed that there was a significant drop across multiple segments. The drop triggered a decline of 14.5% in the platform’s overall trading revenues, which reached €128.9 million compared to the same period last year.

The exchange operator also reported significant declines in revenues across multiple asset classes. The revenues reported from cash declined by 23.7%, while revenues from derivatives trading also dropped. On the other hand, the fixed income and power trading revenues reported gains of 7% and 8.4%, respectively.

Overall revenues drop in Q1

During the first quarter of 2023, Euronext reported consolidated revenues and income of €372.3 million. The figure represented a decline of 5.9% from the €395.7 million that was reported during the first quarter of 2022.

While explaining the financial performance during the period, Euronext said that the consolidated revenue dropped because of the comparison base of equity-related trading activities and FX rate variation effects. The platform further said that the decline was offset by the positive performance of the non-volume related activities and the positive performance of other activities, such as fixed income and power trading.

The Chief Executive Officer of Euronext, Stéphane Boujnah, commented on the development saying, “We recorded a solid performance in the first quarter of 202 despite a first quarter of 2022 that was marked by unprecedented volatility on volumes due to geopolitical events resulting in a strong comparison basis.”

There have been concerns over the effects that the Russia-Ukraine war has had on the global FX markets. Euronext said that the decline in overall revenues was offset by the positive performance of the non-volume related activities and the positive performance of fixed income and power trading activities.

The trading platform said that the non-volume related revenue accounted for 58% of the underlying revenue by the company during the first quarter, which was an increase from the 55% reported during the first quarter of 2022. The figures showed that the company had successfully diversified towards non-volume related activities and positive trading activity during the first quarter because of an increase in volatility.

The report comes as other European exchanges work on ways to diversify their operations to avoid relying solely on trading fees. Deutsche Borse offered to acquire the SimCorp financial company to diversify its operations.