Dec. 2 (Bloomberg) -- Oanda Corp., a provider of online foreign-exchange services, named former PayPal Inc. executive Edmond Eger III as chief executive officer and president as it seeks growth amid consolidation and increased regulation.
“Given the state of the industry, it’s clear there are changes afoot and Oanda will look for both organic and in-organic opportunities to continue to grow our business,” Eger said in a telephone interview from Toronto.
Eger, 52, comes from PayPal where he helped run the payment provider’s Americas business and before that served as chief executive at Citigroup Inc.’s international consumer credit card business with operations in over 50 countries, according to a statement from Oanda. The closely-held company is considering an initial stock offering, though it didn’t comment further on a possible share sale.
Low foreign-exchange market volatility and increased government regulation are squeezing profits in the industry, prompting a wave of mergers in recent months. FXCM Inc., the largest retail currency broker in the U.S., bought one rival and the U.S. retail outlets of another and Toronto-based Oanda snapped up Currensee Global Inc. in September. Gain Capital Holdings Inc. rebuffed a takeover bid only to buy up another rival earlier this year.
Oanda and its competitors, who provide a trading platform for individuals and institutions in the $5.3 trillion-a-day foreign-exchange market, are facing increasing costs as U.S. regulators require at least $20 million in capital for companies serving retail clients and the European Union also increases capital requirements along with regulation.
At the same time a less volatile currency market decreases the opportunities for profit. JPMorgan Chase & Co.’s Global FX Volatility Index has fallen to 8.5 percent, compared to a five-year average of 11.8 percent, data compiled by Bloomberg show.
“It would not surprise me to see continued change,” in the retail broker market, Eger said. “The regulatory environment, the capital requirements in this industry, will ultimately push out some of the weaker players and the stronger players like Oanda will survive.”
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