Clampdown hurts profits at spread better IG

ONLINE trading house IG saw profits slump by a third this year after a clampdown by watchdogs, but new chief executive June Felix says the business will return to growth next year.

The spread betting firm was hurt by a European clampdown on leveraged betting products that expose amateur traders to potentially fierce losses. Profit for the year fell 31% to £193 million.

Felix (pictured), a former banker, is the most senior woman in a maledominated industry. She said IG has “successfully navigated” the new rules. “We believe that regulation will be a positive thing,” she added.

The shares slid 4p to 576p. Regulators have been worried about the explosion of mobile phone apps that let anyone with a bank card place bets on currencies, shares and commodities. IG insists it is different from rivals because it has a base of longstanding clients, typica l ly I T- s av v y entrepreneurs over the age of 45.

“Our business model is focused on aligning our interests with our clients,” said Felix.

Industry figures show that most punters who make spread bets or buy CFDs (c o n t r a c t s fo r d i f fe re n c e) lose money.

IG says market conditions were less favourable this year than last, as lower volatility hit trading revenues. Revenue fell from £569 million in 2018 to £477 million this year. Costs next year will rise by £30 million as IG splashes out on promotional activity to grow its business in the EU and in the USA. It plans to return to growth in the second half of 2020.