Exclusive FNG… FNG has learned that London-based institutional broker ITI Capital saw revenue erode by 12% in 2023, although a much lower cost base – as the firm exited the retail client business – led to much improved profitability.
ITI Capital’s revenue was £10.2m in 2H23, down 12% from £11.6m in 2022. However, net profit of £4.3m compared to a loss of £195K the previous year , despite a lower revenue base, as ITI cut management costs from £11.8m in 2022 to just £5.0m last year.
ITI Capital, owned by Guernsey-based investment firm Da Vinci Capital, provides comprehensive trading and brokerage services for professional and institutional clients and eligible counterparties. The firm is an FCA regulated firm with a restricted license – assigned prime broker.
ITI said it plans to continue to grow its institutional business and fully divest its non-core business. In June 2022, the company introduced voluntary requirements (VREQ) regarding the closure of its retail customer services. The phase-out continued through 2022 and 2023 and approximately 98% of opt-out retail customers were divested. The company said it continued to make progress in exiting the retail market and de-risking its retail portfolio. ITI estimates that there will be a residual customer book for several years and this will be done as part of the overall business plan. The plan is therefore split between institutional and residual retail components with governance and oversight including the resources required to appropriately oversee the management of the residual retail component, while expanding institutional activity.
ITI’s management team said it proved in 2023 that its institutional business could be successful despite regulatory constraints and an adverse market environment. The company estimates that the exit from retail and a further focus on professional and institutional brokerage activity will lead to a significant reduction of the operational infrastructure and higher profitability of the business.
ITI Capital continues to operate under a restricted license from the FCA, under which the Company is not permitted to on-board new clients.
ITI Capital’s 2023 income statement follows below.
