Getco Europe, the region’s largest electronic market-making company and a unit of Chicago-based Getco, has reported an 11 per cent decline in pre-tax profits in 2010 as it faced soft trading volumes.
In a filing with UK authorities, the European subsidiary of the US group said it had made a trading profit of $219.4m, down from $230.4m in 2009, resulting in pre-tax profits of $67.1m compared with $76.2m a year ago.
The group employs 42 staff in Europe. That meant that average revenue per employee last year was about $5.1m, down from $7.4m a year ago but still a ratio far above those of the world’s largest investment banks.
The figures marked a further decline in revenues at Getco Europe since reaching a high point in 2008, when extreme market volatility pushed turnover to $323m and profits rose to just more than $100m.
Getco, founded in 1999 in the US by two floor traders from the Chicago options market, has been at the leading edge of an electronic upheaval in US stock markets, as technology-heavy high-speed trading firms have come to dominate trading.
The group acts as a proprietary trader and market maker, and aims to limit its exposure to risk by trading flat at the end of each trading day.
However, the 2010 accounts acknowledged that the group faced major challenges this year. Among them was “a stubborn growth in trading volumes due to the global recession and slower adoption rate by market venues of electronic trading and economic barriers to high volume trading,” Getco Europe said.
To counter that, Getco last month snapped up Automat, a small lossmaking UK derivatives proprietary trader, to extend its push into forex derivatives trading.
Getco Europe paid out $36.9m in salaries, benefits and compensation to employees, including directors, in 2010, down from $37.5m the year before and paid out $45m in dividends, up from $40m in 2009.
Getco said it would make no further comment on the results.
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