CMC Outpaces IG Australia: Leading Market Growth

CMC outpaces IG Australia, establishing itself as a leader in market growth and profitability. In the second half of the last fiscal year, the London-listed broker generated over £62.3 million in revenue from its Australian operations, surpassing its earnings in the United Kingdom. This marks the second time CMC’s Australian revenue outstripped that from its home market, with the first instance occurring in H2 FY23. At that time, CMC earned £45.4 million from Australia and £39.3 million from the UK. Both of these figures were lower than the most recent earnings.

While CMC continues to grow in Australia, IG Group (LON: IGG) appears to be losing market share there. IG’s revenue from Australia, which exceeded £65 million in H1 FY21, dropped to £41.1 million by H2 FY24. Plus500, another broker listed in London and based in Israel, has faced a similar decline. Its Australian revenue fell to $24.8 million in the first half of 2024, a 155 percent decrease from its peak in H1 2020. While Plus500 saw some recovery in H1 2022, its revenue has since stabilized in the mid-$20 million range.

CMC Outpaces IG Australia: Amid Rapid Growth in Financial Market

CMC’s success in Australia is attributed to its white-label stockbroking partnership with the Australia and New Zealand Banking Group (ANZ), which began in 2019. This collaboration involved migrating more than 500,000 clients to CMC’s platform. In an interview with Finance Magnates, Michael Bogoevski, the Head of Institutional ANZ at CMC Connect, stated that prior to the ANZ deal, CMC “had a retail business, and we were offering white-label solutions to second-tier banks.” He further explained, “That deal had 200 partner clients attached to the retail book… At its peak, we had five white-label deals, which is pretty much the majority of the Australian stockbroking market.”

Interestingly, CMC began reporting its Australian revenue separately in fiscal 2023. Previously, it grouped revenue from APAC and Canada together, with the peak being £95.3 million generated between April and September 2020 from those markets.

IG Group, with a market cap of £3.39 billion, remains dominant in the UK. Between December 2023 and May 2024, the company generated £147.6 million from the UK market out of its total half-yearly income of £442.5 million. The US market was second, contributing £77.5 million, followed by the EU with £54 million. Singapore, despite being a small country with only 5.8 million people, generated £37.3 million for IG in H2 FY24, close to Australia’s £41.1 million and Japan’s £39.6 million.

Competitive Trading Landscape

A significant boost in IG’s US income followed its acquisition of tastytrade for $1 billion in 2021. Plus500, meanwhile, continues to derive most of its revenue from the European Economic Area (EEA), where it earned $169.6 million in the first half of 2024. Despite the fluctuations during the pandemic, Plus500’s current UK revenue is much higher than pre-pandemic levels, and its second-largest market is the “rest of the world,” which includes markets outside the EEA, UK, and Australia. From this category, Plus500 brought in $169.3 million in H1 2024, nearing the pandemic peak of $174.4 million.

Despite shrinking revenue in both the UK and Australia, Plus500’s latest UK earnings of $34.5 million remain above pre-pandemic levels, although lower than most post-pandemic periods. The same trend is evident in its Australian revenue.

While CMC thrives in Australia, IG demonstrates how lucrative Singaporean traders can be. The average revenue per Singaporean trader reached £4,914, the highest for IG, second only to its institutional clients. By comparison, UK and Australian traders generated £3,054 and £2,977, respectively. The EMEA non-EU market also remains profitable for IG, with £4,463 in revenue per client.

Even though IG and Plus500 are larger companies, CMC surpasses them in terms of profitable clients. In the most recent half-yearly figures, CMC’s average revenue per client was £2,818, compared to $2,264 for Plus500 and £2,403 for IG.

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