IG Group Says SNB FX Move to Cost Firm $46 MillionSarah Jones
IG Group Holdings Plc said the Swiss National Bank’s “exceptional” move to abandon the franc’s cap against the euro will cost the U.K. spread-betting firm as much as 30 million pounds ($46 million).
The firm, which opened in Geneva last year, said the financial impact from the surge in the Swiss franc was partially dependent on its ability to recover clients debts, according to a statement. The stock tumbled 5.9 percent to 698.50 pence at 4:42 p.m. in London trading, the biggest decline since July 2013.
“The market exposure occurred where client positions were closed at a more beneficial level than the company,” IG said in the statement.
IG Group calls itself the world’s biggest provider of contracts for difference, financial instruments that allow clients to bet on future movements of a security or currency without owning it. The franc surged as much as 38 percent against the U.S. dollar and 41 percent against the euro after the SNB said it has given up on a minimum exchange rate per euro, ending a policy to protect the Swiss economy from investors piling into the currency.
IG is scheduled to report its first-half results on Jan. 20. The company opened offices in Geneva in October to win business from the country’s private banks. First-quarter sales fell 9 percent to 85.6 million pounds, the company said in September.