BinckBank has blamed its slow start of the year to a poor beginning of the financial markets in 2016 with investors' wariness resulting in lower transaction volumes (2.1 million, 23% lower compared to 2.7 million transactions in 15Q1) and lower average revenues per transaction, according to the bank's Q1 2016 results. The Belgian branch was particularly hit hard as a result of the introduction of the speculation tax on January 1, 2016. Transaction volume in Belgium was down 36% in Q1 2016 to 185,103 (Q1 2015: 288,880).
The online broker reported that income from the issuance of Binck turbos, was €0.3m in the first quarter of 2016 with the outstanding position of turbos also lower on average compared to the first and fourth quarter of 2015 (both €0.5m), the bank said.
The operating result at BinckBank Belgium declined in Q1 2016 to €0.8m (Q1 2015: €2.5m). In comparison to the fourth quarter, the negative effect of the speculation tax was clearly visible, the bank said. Compared to developments in the other countries, the 8% decline in transaction volume to 185,103 in Belgium was a particularly large fall. Total income declined 5% to €2.8m.
The speculation tax on capital gains realised by private individuals on equities sold within six months of their acquisition applies at the rate of 33% on net gains and the government has said it aims to collect €34m with this measure. The tax applies to listed warrants, options and turbos on one or more predetermined listed shares and certificates of shares. ETFs and warrants, options and turbos linked to indices, commodities or currencies do not come under the new tax.
However, because the speculation tax only applies to Belgian and foreign stock exchanges and multilateral trading platforms which work with at least one daily trading and a central order book, Binck turbos - which are traded on a bilateral platform (Cats, the trading platform of Börse Stuttgart) - are not subject to the tax, according to Thomas Huyghe (pictured), business manager of BinckBank Belgium. "No new information is available which would change our interpretation of the tax," said Huyghe. "As far as we are concerned Binck turbo's do not come under the speculation tax."
The Binck turbo, which was introduced in Belgium on November 12, 2015, accounts for more than 60% of all turbo activity, reported the company. "Better trading times and a recent expansion of the range of Belgian underlyings could explain the success of the Binck turbo," Huyghe said.
Since the first Binck turbo was launched in the Netherlands in July 2014, the bank has issued 5,761 turbos linked to shares and 828 turbos linked to indices. The Binck turbos on offer in the Netherlands are the same turbos as the ones which the broker offers to its clients in Belgium.
Although transaction volume at 2.1 million was 6% higher than in the fourth quarter of 2015, it was well below the level reached in the first quarter of 2015, said Vincent Germyns, chairman of the executive board of BinckBank, in a statement.
"In that period, we were experiencing a bull market as a result of the announcement of the ECB's bond buying programme," said Germyns. "The tone in the market at the beginning of 2016 was one of increased uncertainty. Private investors have been taking a cautious stance since the autumn of 2015, which has led to lower transaction volumes, smaller order sizes and a lower average income per transaction."
Click the link to view the BinckBank first quarter report 2016.
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