Wealth manager Cantor Fitzgerald’s Irish profits drop 90% in 2015

Stockbroking and wealth management firm Cantor Fitzgerald's Irish unit saw its earnings decline by 90 per cent in 2015 as it had benefited in the previous year from a huge distribution by the Irish Stock Exchange (ISE) to members.

Cantor Fitzgerald Ireland, led by chief executive Ronan Reid, posted a pretax profit of €506,096 in 2015, down from €6.08 million for the previous year, when it received a €4.58 million payment from the ISE, according to recently-filed accounts.

The ISE made a €27 million in total special payment to its founder members in 2014 following a demutualisation of the exchange. Cantor Fitzgerald owns 8.4 per cent of the bourse, having spent €934,250 increasing its stake from 6 per cent in 2014 as another original shareholder, Royal Bank of Scotland, sold its holding.

Gross income at Cantor Fitzgerald Ireland in 2015 rose to €16.8 million from €15.8 million for the previous year. However, administrative expenses grew at a faster pace, to €16.4 million from €14.9 million.

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"Revenues grew again in 2015 , but like all financial business, we have faced increases in cost, a consequence of higher compliance costs and the indirect effect of zero [ECB] interest rates," Mr Reid told The Irish Times.

“The company recorded operating profits despite significant increases in regulatory and human resource costs while also investing in technology and infrastructure.”

The average number of employees grew by almost 10 per cent during the reporting year to 110, according to the accounts. Staff numbers also increased in 2016.

Income boost

Cantor Fitzgerald’s presence in Ireland stems from its 2012 purchase of Dolmen Securities. The company received a large income boost in the first week of this year when it was included among a group of managers that sold €4 billion of bonds for the State. It is understood that this alone generated €1.3 million of fees for the firm.

Meanwhile, the Sunday Times reported over the weekend that bonuses at Dublin's top stockbroking firms were slashed last year as corporate activity and wealth management business fell. While there were four flotations in 2015, the only fresh listing in the Irish Stock Exchange was venture capital firm Draper Esprit, which joined the junior market after raising €102 million.