Interim Financial Report

30 June 2017
CLS Group Holdings AG

This year’s interim financial report speaks to a substantial shift at CLS. As David highlights in his message, the strategy agreed with the CLS Board of Directors and shared at the Annual General Meeting is ambitious. And while not short of challenges, it will deliver the client-focused organization CLS must become to compete in an increasingly complex and fragmented marketplace. The opportunity is immense: our unique position at the center of the FX market enables us to collaborate widely across the industry and lead the development of standardized solutions that enhance business critical processes for all our clients.

This is a long-term strategy and one which will require significant ongoing investment in technology, operations and people. As Trevor highlights in his report, this substantial investment has now begun and is reflected in the results for the first half of this year.

Overall, revenues were slightly down compared to the same period last year reflecting the prolonged period of lower volatility in the market. However, the more notable change was in our operating costs, which increased compared to the same period last year. This is a reflection of our heightened level of investment in new products. While this will have an impact on our return on equity, we believe this sustained investment in our growth is the right approach. We will remain resolutely focused on balancing the resource, investment and regulatory requirements of our main settlement service with this product diversification program and never lose sight of ensuring our main settlement service operates at peak performance. 

As Chairman, I would like to highlight the joining of nine new members to the CLS Board of Directors: Vidya Bittianda, Group General Manager, Risk Metrics at ANZ Banking Group Limited; David Gary, Global Head of Non-Market Risk for FX Business at Deutsche Bank; Akira Hoshino, Senior Fellow & General Manager, Global Markets Trading Division at Bank of Tokyo-Mitsubishi UFJ; Dominique Le Masson, Senior Coordinator for European Market Infrastructures at BNP Paribas Group; Bryan Osmar, Former Managing Director & Head of Market Infrastructure at RBC as an Independent Director; William Stenning, Managing Director, Clearing, Regulatory & Strategic Affairs, Investment Bank Directorate at Societe Generale; Fabrizio Tallei, Head of FX & International Money Market – Treasury at Intesa Sanpaolo; David Thomas, CEO at RBC – Capital Markets; and Ronnie Yam, Regional Chief Financial Officer at United Overseas Bank Limited. All are welcome additions to the Board and their combined expertise and knowledge of the global FX market will provide valuable counsel in critical areas such as operations, technology and risk management.

CLS is evolving to meet the challenges of the market and I look to the Executive Management Committee to continue leveraging our experience and market intelligence and lead the development of innovative solutions that respond to the needs of our clients. New products such as CLSNow, CLSNet and our enhanced data offering speak to the opportunity we have to make the trading process faster, easier, safer and more cost effective. You can find a progress report on these products in David’s message.
There is still much to do, but I am confident we have the team to deliver long-term sustainable growth for you, our shareholders.

Ken Harvey
Chairman of the Board

Interim Financial Report 2017