Saxo Bank

Saxo Bank is a Danish investment bank specializing in online trading and investment. It was founded as a brokerage firm in 1992, under the name Midas Fondsmæglerselskab (English: ''Midas Stockbroker Company''), by Lars Seier Christensen, Kim Fournais, and Marc Hauschildt. The name was changed to Saxo when the company obtained a banking license in 2001. Saxo offers trading through its online platforms in Forex, stocks, CFDs, futures, funds, bonds, and futures spreads. The company functions as an online broker with a bank license, without offering traditional banking products. According to Saxo, roughly half of its activities are derived from partnerships with institutional trading partners. More than 100 financial institutions globally service their end clients with Saxo Bank's platforms on a white-label basis

Saxo Bank is headquartered in Copenhagen, but also has offices in financial centres such as London, Paris, Zurich, Dubai, Singapore, India, and Tokyo. According to the bank, it has clients in 180 countries and has a daily average turnover of approximately US$12 billion.

Saxo Bank is known for its success in online trading and investment and has received a number of awards. Domestically the bank is also known for its two founders who are often outspoken on Danish politics. Revenue reached DKK 3,006 million in 2014 delivering a net income of DKK 381.2 million. It has a staff of 1600.

Saxo Bank has launched several white-label partnerships with banks such as Standard Bank, Old Mutual Wealth, Banco Carregosa and Banco Best.

Ownership

Saxo Bank is privately held with Geely Financials Denmark A/S – a subsidiary of Chinese automotive company Zhejiang Geely Holding Group Co., Ltd – owning a 50.89% stake. Founder and CEO, Kim Fournais, owns 27.53%, while Sampo Group owns 19.43% of the company. Minority shareholders, including current and former employees, hold the remaining shares.

Business model

Saxo Bank describes itself as a facilitator in financial markets. For trading in listed equities, liquidity is provided through connectivity to the world's major stock exchanges. For online margin trading in non-listed products, the bank obtains liquidity from more than 15 large banks. Through its trading platforms, both retail and institutional clients have access to a range of financial instruments: Forex, stocks, CFDs, futures, funds, bonds, and futures spreads.

Saxo Bank services both retail clients and institutional clients such as banks, brokers, fund managers, money managers, family offices, and private banks.

History

1990s: Midas Fondsmæglerselskab

Lars Seier Christensen and Kim Fournais formed Midas Fondsmæglerselskab after meeting in London in the early 1990s. Christensen was working as a broker for Gerald Metals at the time while Fournais worked at the now defunct Lannung Bank. The two said that they both felt like they had found their business soul mate.

When the company acquired its license, the periodical ''Økonomisk Ugebrev'', ''Economic Weekly'' began publishing an article series on ''sidegadevekslererne'', the bucket shops of Denmark, and included Midas.''Economic Weekly'', 12–97 During the autumn of 1996 well-known Danish business man Karsten Ree claimed he had been cheated by Midas into making fictive investments via their wealth management services, suffering losses in excess of DKK 800,000 in one month.

The company subsequently underwent a criminal investigation by the Director of Public Prosecutions but was cleared of all charges.

2000s: Name change and banking license

In 1997 Midas launched its first internet product; a trading platform for currencies called ''MITS'' (later replaced by ''SaxoTrader''). The company renamed to Saxo Bank, named after the Danish Saxo Grammaticus, because there was already a Nigerian bank called Mida operating at an international level. Saxo obtained its new banking license in 2001, began expanding its online presence and moved to new headquarters in the Copenhagen suburb of Gentofte.

Global expansion and acquisitions

Saxo Bank launched its products and services in Europe during the early 2000s. In 2001, its first white-label product was launched with a Portuguese securities dealer. In September 2004, it also launched its first US white-label product. Following the launch of Citigroup's CitiFX Pro, an online foreign exchange trading platform developed by Saxo, in November 2008, the Bank would focus entirely on its institutional clients in the US.

In September 2007, Saxo announced the acquisition of its Swiss white-label client, Synthesis Bank. In late May, Saxo bought a French brokerage, Cambiste, that was later renamed Saxo Banque France. During 2009, Saxo opened offices in Milan, Prague and Dubai. By year-end, Saxo Bank had around 13–14 foreign sales offices, up from eight the year before.

Saxo has since been growing through add-on acquisitions and startups, and has built an asset management department, Saxo Asset Management, legally segregated from the rest of the Bank, through acquisitions. In 2009, Saxo acquired Sirius Kapitalforvaltning and in June 2009, it purchased the full share capital of Capital Four Management Fondsmaeglerselskab A/S and 51% of the share capital of Global Evolution Fondsmaeglerselskab A/S, providing expertise for Danish bond & equity instruments.

In 2015, Saxo Bank invested in financial technology firm, Saxo Payments The business was sold by Saxo Bank in July 2018 to investment firm EQT (through EQT VIII and EQT Ventures) for $300M after Saxo Payments relaunched as Banking Circle.

2010 growth

In March 2010, Saxo Bank launched a new equity platform able to trade in over 11,000 stocks and other products listed on 23 major exchanges worldwide.

Saxo Bank was later named the ''Best White Label Solution Provider'' in the world, at the World Finance Foreign Exchange Awards 2010, citing "the Bank's long established program of investment and innovation within its White Label business". In the same month the bank was also awarded ''Best re-labelling platform for 2010'' by industry magazine ''Profit & Loss''. Saxo was voted into the top spot by subscribers to represent 'reader's choice'.

In July 2010, CEO Kim Fournais stated that the bank's 2009 turnover of DKK 70 billion on a daily basis had been broken, despite negative press at the start of the year. The growth is believed partly to spring from an explosive growth in Saxo Bank's largest partner, Citi, whose turnover resulting from trading grew nearly 500% in the first 6 months of 2010. In August 2010, the Bank's half-year results revealed that net profit had indeed increased 13-fold from DKK 41 million to DKK 551 million, making the first six months of 2010 better than any other full year in Saxo Bank's history.

In its 2010 results, Saxo Bank proved to have grown way beyond industry averages with profits trebling compared to 2009. It also revealed that it had launched another online platform this time with Barclays Stockbrokers to supply their UK client base with an International Equities platform. Named 'International Trader', it encompasses over 9,000 equities, 21 major global exchanges in 13 international markets and Securities research. The release were already being marketed widely in the UK marketplace as well as to Barclays' existing UK clients base. In May 2011, Saxo Bank furthermore announced it would provide TD Waterhouse, the UK's leading execution only broker, with an online derivatives trading platform for retail investors.

Transparency initiatives

According to Markit, Saxo Bank was the first financial institution to report its CFDs on Single Stock trades on a voluntary basis, in a bid to bring greater transparency to this fast growing market.

Australia

In 2012, Saxo Bank was reprimanded by the Australian Securities & Investments Commission (ASIC) over its risk management practices, two days after announcing intention to develop retail online trading in Australia. The regulator imposed extra licensing conditions, including a requirement to hire an expert to check on its subsidiary Saxo Capital Markets Australia's systems to address credit risk, client risk and compliance risk.

The ASIC Chairman, Greg Medcraft, said the additional licence conditions on Saxo Bank's AFSL reflected ASIC's priority to improve industry standards amongst financial services licensees. He added that the new licence conditions were an important part of restoring investor confidence in the broader broking area and providing reassurance that compliance procedures are in place to ensure risk management practices are of the standard required under the law. This came after Russell Johnson, Director of Sonray Capital Markets, which acted as a white-label to Saxo Bank, was sentenced to six and a half years in jail after the firm owed A$76 million.

Stock broker BBY appointed liquidators in June 2015 due to insufficient funds to meet its obligations. BBY operated as a white-label to Saxo Bank offering Foreign Exchange contracts and other financial products. Court proceedings deemed that BBY illegally pooled a disproportionate level of funds with Saxo Bank which should have been allocated to clients holding Equities and Exchange Traded contracts.

Saxo Privatbank

On 17 September 2010, Saxo Bank announced plans to invest DKK 59 million in Brorup Sparekasse; a small Danish savings bank founded in 1897 with seven branches, which was renamed to Saxo Privatbank offering core banking services in Denmark. The bank also said that it intended to offer at least DKK 150 million more in capital contribution when the terms for transforming the Brorup Sparekasse into a joint-stock company were fulfilled. Brorup Sparekasse ran into difficulties in 2008 and 2009, primarily due to failed speculation in unlisted bonds, which led to 2009 negative revenue of DKK 74 million before tax. Saxo Bank later announced that the terms for transforming Brorup Sparekasse into a joint-stock company were fulfilled with Saxo Bank as the largest shareholder owning 98,6%

Saxo Privatbank had branches in the Danish cities Brørup

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