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Swissquote in Brexit bypass deal

Reuters / Share:
FILE PHOTO: A man walks in front of publicity in the city of Luxembourg, Luxembourg, March 25, 2017. REUTERS/Eric Vidal

ZURICH, (Reuters) – Swissquote is buying Luxembourg-based Internaxx Bank for 27.7 million euros ($32 million) to secure access to European Union markets that its London hub faces losing after Brexit.

The Swiss online bank said it is financing the purchase from Interactive Investor Ltd, majority controlled by private equity firm JC Flowers & Co, without any need to raise fresh equity or debt. The deal still requires regulatory approval.

“We are operating already today in Europe, unfortunately it is out of London. With the coming Brexit we needed to have strategic options and Luxembourg is a very good place for these,” its chief executive Marc Buerki said on a call.

Operating as an online bank since 2001 and profitable since 2006, Internaxx — known for its quirky advertising pitched to expatriates — has 12,000 clients, 2 billion euros of assets under custody, and 2017 revenue of 10 million euros.

Buerki said Internaxx would help Swissquote expand its offering of cryptocurrency, roboadvisory and multi-currency credit card products to thousands of expat European clients.

Swissquote generates 10 percent of its revenue from European clients, while its London forex business targets not only British nationals but also clients across Europe.

The company, whose shares were up 1 percent at 1037 GMT, will remain based in Switzerland and leave management in place at Internaxx, which could eventually be renamed Swissquote Europe, executives said.

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