Swissquote to buy Luxembourg's Internaxx to bypass Brexit (updated)
07/08/2018 11:10
(Adds comments from conference call)
By Michael Shields
ZURICH, Aug 7 (Reuters) - Swissquote SQN.S is buying
Luxembourg-based Internaxx Bank for 27.7 million euros ($32
million) to secure access to European Union markets that its
London hub faces losing after Brexit.
The Swiss online bank said it is financing the purchase from
Interactive Investor Ltd, majority controlled by private equity
firm JC Flowers & Co, without any need to raise fresh equity or
debt. The deal still requires regulatory approval.
"We are operating already today in Europe, unfortunately it
is out of London. With the coming Brexit we needed to have
strategic options and Luxembourg is a very good place for
these," he said," Chief Executive Marc Buerki said on a call.
Operating as an online bank since 2001 and profitable since
2006, Internaxx -- known for its quirky advertising pitched to
expatriates -- has 12,000 clients, 2 billion euros of assets
under custody, and 2017 revenue of 10 million euros.
Buerki said Internaxx would help Swissquote expand its
offering of cryptocurrency, roboadvisory and multi-currency
credit card products to thousands of expat European clients.
Swissquote generates 10 percent of its revenue from
European clients, while its London forex business targets not
only British nationals but also clients across Europe.
The company, whose shares were up 1 percent at 1037 GMT,
will remain based in Switzerland and leave management in place
at Internaxx, which could eventually be renamed Swissquote
Europe, executives said.
It planned no major changes in London, where it employs
around 30 staff.
"We anticipate limitations there due to Brexit ... It is
still a good place to be, but the expansion plans we had two
years ago before Brexit happened had to be stopped in favour of
this strategic move with Luxembourg," Buerki said.
($1 = 0.8654 euros)
(Reporting by Michael Shields, Editing by Sherry Jacob-Phillips
and Alexander Smith)
((zurich.newsroom@thomsonreuters.com; +41 58 306 7336;))