Swissquote : First half of 2020

Headline 1

Headline

Financial

Report

Condensed consolidated

Interim Financial Statements

First Half Year 2020

◚⯎

Annual Report 2019	1

Content

• Condensed consolidated interim statement of financial position

4	Condensed consolidated interim income statement

• Condensed consolidated interim statement of comprehensive income

• Condensed consolidated interim statement of changes in equity

• Condensed consolidated interim statement of cash flows

• Notes to the condensed consolidated interim financial statements
  21 Report on the Review
  22 Global presence services
  23 Swissquote offices

Condensed consolidated interim statement of financial position

				30 June			31 December
		Notes	2020		2019	2019
in CHF
Assets
Cash and balances with central bank				2,925,236,930		3,892,363,946	2,871,118,650
Treasury bills and other eligible bills				716,452,528		411,919,781	439,206,719
Due from banks				2,165,541,463		1,219,493,035	2,159,429,953
Derivative financial instruments				65,080,915		84,244,289	97,759,018
Trading assets				6,840,544		3,932,304	5,949,451
Loans				416,607,386		309,379,917	338,672,203
Investment securities				494,067,333		307,733,837	334,936,276
Deferred income tax assets				2,987,175		3,412,574	3,466,758
Intangible assets				45,525,199		45,947,206	45,727,825
Information technology systems		12		59,728,413		51,804,716	55,690,924
Property, plant and equipment		13		70,590,833		72,347,411	70,455,998
Other assets				60,242,027		49,711,312	50,294,283
Total assets				7,028,900,746		6,452,290,328	6,472,708,058
Liabilities and equity
Liabilities
Deposits from banks				300,973,857		175,903,534	129,920,394
Derivative financial instruments				44,466,416		63,911,770	58,940,824
Due to customers				6,167,462,166		5,765,982,688	5,813,524,509
Other liabilities				90,435,896		83,614,028	86,124,178
Current income tax liabilities				5,726,561		1,748,673	2,913,765
Deferred tax liabilities				1,082,033		943,624	937,160
Provisions				7,342,192		3,295,080	5,589,838
Total liabilities				6,617,489,121		6,095,399,397	6,097,950,668
Equity
Ordinary shares				3,065,634		3,065,634	3,065,634
Share premium				53,211,793		52,115,761	52,399,616
Share option reserve				2,302,629		1,784,985	2,134,630
Other reserve				(14,893,650)		(8,736,174)	(13,668,548)
Treasury shares				(17,848,498)		(18,040,392)	(18,787,665)
Retained earnings				385,573,717		326,701,117	349,613,723
Total equity				411,411,625		356,890,931	374,757,390
Total liabilities and equity				7,028,900,746		6,452,290,328	6,472,708,058

Interim report H1 2020

3

Condensed consolidated interim income statement

				6 months ended 30 June
	Notes	2020		2019
in CHF
Fee and commission income				92,135,195		49,952,966
Fee and commission expense				(8,755,777)		(4,312,442)
Net fee and commission income	6		83,379,418		45,640,524
Interest income				13,924,190		10,493,889
Interest expense (incl. negative interests on assets)				(11,112,510)		(15,514,849)
Other interest income				12,126,963		21,371,330
Other interest expense				(296,533)		(252,375)
Net interest income	7		14,642,110		16,097,995
Net trading income	8		86,487,489		50,916,457
Operating income				184,509,017		112,654,976
Credit loss expense	11		(23,787,486)		(409,370)
Operating expenses	9		(102,283,198)		(87,144,935)
Operating profit				58,438,333		25,100,671
Income tax expense				(8,051,773)		(3,052,491)
Net profit				50,386,560		22,048,180
Share information
Earnings per share	10		3.38		1.48
Diluted earnings per share	10		3.35		1.48
Weighted average number of shares	10		14,890,143		14,870,735

Interim report H1 2020

4

Condensed consolidated interim statement of comprehensive income

				6 months ended 30 June
		Notes	2020		2019
in CHF
Net profit				50,386,560		22,048,180
Other comprehensive income:
Gains/(losses) recognised directly in equity
Items that may be reclassified to the income statement
Investment securities measured at fair value through other comprehensive
income (FVOCI):
Net unrealised gains/(losses)				(76,685)		54,498
Net realised gains/(losses) reclassified to the income statement from equity			(74,533)		40,458
Income tax effect			97,488		(13,294)
Currency translation differences				(1,515,305)		(733,411)
Total other comprehensive income/(loss) that may be reclassified to the
income statement				(1,569,035)		(651,749)
Items that will not be reclassified to the income statement
Investment securities measured at fair value through other comprehensive
income (FVOCI - equities):
Net unrealised gains/(losses)			560,994		3,700
Income tax effect			(77,417)		(518)
Defined benefit obligation:
Remeasurement	4		(162,000)		(1,861,000)
Income tax effect			22,356		260,540
Total other comprehensive income/(loss) that will not be reclassified to the
income statement			343,933		(1,597,278)
Other comprehensive income for the period (net of tax)				(1,225,102)		(2,249,027)
Total comprehensive income for the period				49,161,458		19,799,153

Interim report H1 2020

5

Condensed consolidated interim statement of changes in equity

				Ordinary		Share	Share option	Other	Treasury	Retained
	Notes	shares		premium	reserve	reserve	shares	earnings	Total
in CHF
Balance as at
1 January 2020				3,065,634		52,399,616	2,134,630	(13,668,548)	(18,787,665)		349,613,723	374,757,390
Net profit of the period				-		-	-	-	-	50,386,560	50,386,560
Investment securities
FVOCI & FVOCI equities				-		-	-	409,776	-	-	409,776
Remeasurement of
defined benefit obligation 4	-		-	-	(162,000)	-	-	(162,000)
Income tax effect
(aggregated)				-		-	-	42,427	-	-	42,427
Currency translation
differences	-		-	-	(1,515,305)	-	-	(1,515,305)
Total comprehensive
income for the period	3,065,634	52,399,616	2,134,630	(14,893,650)	(18,787,665)		400,000,283	423,918,848
Dividend				-		-	-	-	-	(14,899,013)		(14,899,013)
Employee stock option
plan:
Amortisation of services				-		-	640,446	-	-	-	640,446
Stock options exercised,
lapsed or forfeited				-		-	(472,447)	-	-	472,447	-
Treasury shares:
Purchase	-		-	-	-	(1,481,006)	-	(1,481,006)
Sale/remittance				-		812,177	-	-	2,420,173	-	3,232,350
Balance as at 30 June 2020				3,065,634		53,211,793	2,302,629	(14,893,650)	(17,848,498)		385,573,717	411,411,625
Balance as at 1 January
2019				3,065,634		51,630,459	1,265,122	(6,487,147)	(16,723,797)	319,470,264	352,220,535
Net profit of the period				-		-	-	-	-	22,048,180	22,048,180
Investment securities
FVOCI & FVOCI equities				-		-	-	98,656	-	-	98,656
Remeasurement of
defined benefit obligation				-		-	-	(1,861,000)	-	-	(1,861,000)
Income tax effect
(aggregated)				-		-	-	246,728	-	-	246,728
Currency translation
differences				-		-	-	(733,411)	-	-	(733,411)
Total comprehensive
income for the period	3,065,634	51,630,459	1,265,122	(8,736,174)	(16,723,797)	341,518,444	372,019,688
Dividend	-		-	-	-	-	(14,859,653)	(14,859,653)
Employee stock option
plan:
Amortisation of services				-		-	562,189	-	-	-	562,189
Stock options exercised,
lapsed or forfeited	-		-	(42,326)	-	-	42,326	-
Treasury shares:
Purchase	-		-	-	-	(2,047,561)	-	(2,047,561)
Sale/remittance				-		485,302	-	-	730,966	-	1,216,268
Balance as at 30 June 2019				3,065,634		52,115,761	1,784,985	(8,736,174)	(18,040,392)	326,701,117	356,890,931

Interim report H1 2020

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Condensed consolidated interim statement of cash flows

				6 months ended 30 June
		Notes	2020		2019
in CHF
Cash flow from/(used in) operating activities:
Fee and commission received				94,138,868		51,940,188
Fee and commission paid				(8,470,087)		(4,753,599)
Interest received				24,898,006		26,047,449
Interest paid				(11,807,117)		(13,497,031)
Net trading income received				84,815,386		49,986,310
Income tax paid/reimbursed				(4,776,421)		(6,046,166)
Payments to employees				(47,128,997)		(44,228,977)
Payments to suppliers				(40,641,107)		(31,983,754)
Cash flow from operating profit before changes in
operating assets and liabilities				91,028,531		27,464,420
Net change in operating assets and liabilities:
Treasury bills and other eligible bills (above 3 months)				(217,753,710)		58,060,245
Due from banks (above 3 months)				42,404,401		(101,629,966)
Derivative financial instruments (assets)				32,678,103		(26,774,439)
Trading assets				(1,069,059)		-
Loans				(101,300,643)		(14,135,380)
Derivative financial instruments (liabilities)				(14,474,408)		28,159,569
Due to customers				359,509,228		515,959,083
Net cash from operating activities				191,022,443		487,103,532
Cash flow from/(used in) investing activities:
Purchase of property, plant and equipment and information technology systems	12/13		(16,844,868)		(11,304,743)
Proceeds from sale and reimbursement of investment securities				53,958,998		56,461,969
Purchase of investment securities				(217,933,670)		(45,104,548)
Purchase of subsidiary, net of cash acquired				-	273,394,646
Net cash from/(used in) investing activities				(180,819,540)		273,447,324
Cash flow from/(used in) financing activities:
Repayment of lease liabilities				(1,355,167)		(745,983)
Purchase of treasury shares				(1,481,006)		(2,047,561)
Sale/remittance of treasury shares				3,101,298		1,061,286
Dividend and reimbursement from reserves				(14,899,013)		(14,859,653)
Net cash used in financing activities				(14,633,888)		(16,591,911)
Net increase/(decrease) in cash and cash equivalents				(4,430,985)		743,958,945
Cash and cash equivalents as at 1 January				4,695,284,043		4,144,081,857
Exchange difference on cash and cash equivalents				(4,627,484)		(3,782,041)
Cash and cash equivalents as at 30 June 1				4,686,225,574		4,884,258,761
Cash and cash equivalents:
Cash and balances with central bank				2,925,236,930		3,892,363,946
Treasury bills and other eligible bills (less than 3 months)				281,079,614		263,480,745
Due from banks (less than 3 months)				1,780,882,887		904,317,604
Deposits from banks				(300,973,857)		(175,903,534)
Total as at 30 June				4,686,225,574		4,884,258,761

1 CHF 339.5 million and 438.6 million of cash and cash equivalents were restricted as at 30 June 2020 and 30 June 2019, respectively.	7
Interim report H1 2020

Notes to the condensed consolidated interim financial statements

1. Scope of operations and general information
   Swissquote Group Holding Ltd and its subsidiaries provide online financial services that mainly consist of the services provided by Swissquote Bank Ltd through its financial web portal www.swissquote.ch. The Group foreign subsidiaries which are based in United Arab Emirates (Dubai), United Kingdom (London), Luxembourg (Luxembourg), Malta (Valletta), People's Republic of China (Hong Kong) and Singapore (Singapore) are responsible for the sales of the Group services in respective markets through dedicated web portals. The Group's foreign subsidiary which is based in United Kingdom (London) provides online foreign exchange trading for clients based in European Union. Its European Union-based bank, Swissquote Bank Europe SA (previously styled as Internaxx SA), provides self-directed investment brokerage services to international and expatriate investors.
   At the Annual General Meeting held on 5 May 2020, the shareholders resolved on the payment of dividend of CHF 1.00 per share (10 May 2019: dividend of CHF 1.00 per share).
2. Accounting policies and presentation matters

The Condensed Consolidated Interim Financial Statements are prepared in accordance with IAS 34 "Interim Financial Reporting". The Condensed Consolidated Interim Financial Statements should be read in conjunction with the 2019 consolidated financial statements. The accounting policies used in the preparation of the Interim Financial Statements are consistent with those used in the Annual Financial Statements.

Reportable segments (Note 5): IFRS 8 requires to disclose information that is used by the chief operating decision-maker (CODM) to evaluate segment results and allocate resources. The Group has updated its segmental disclosures effective 1 January 2020 in order to more closer align them with the key performance measures reviewed by the CODM and the developments in management reporting. Following these changes, the Group only reports total operating income for each reportable segment and no longer discloses segmental net profit, nor a segmental statement of financial position. The Group manages financial risks and business activities on a group-wide portfolio basis and a large portion of costs are incurred centrally. These costs are not allocated to individual reportable segments for decision- making purposes and accordingly these costs have not been allocated to reportable segments. Comparative information was changed as required by IFRS 8.

3 Adoption of new and revised international financial reporting standards

1. Standards, amendments and interpretations effective on or after 1 January 2020

There are no IFRS or IFRIC interpretations, effective for the first time for the financial year beginning 1 January 2020, with a material impact on the Group.

1. Standards and interpretations issued but not yet effective

The Group did not early adopt new or amended standards in 2020.

Interim report H1 2020

8

Notes to the condensed consolidated interim financial statements

4 Critical accounting judgements and key sources of estimation uncertainty

In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2019 (Section V: Critical accounting judgement and sources of estimation uncertainty, pages 37-38).

However, it is worthwhile acknowledging that the COVID-19 pandemic gives a greater degree of uncertainty that may exist when making judgements and estimates for the preparation of these interim financial statements.

Overall, the impact of the COVID-19 pandemic resulted in a significant increase in trading volumes that benefited the Group with recording operating income and profitability ahead of its forecasts.

As at 30 June 2020, the Group believes the assumptions that have been made are appropriate under the circumstances and that these interim financial statements are fairly presented in all aspects.

Key assumptions are described below (to be read in conjunction with the Section V of the 2019 consolidated financial statements):

Impairment test in respect of goodwill: No change in circumstances was noted that might have triggered quantitative impairment assessment as the COVID-19 pandemic had rather positively impacted the expected cash flows (in particular because of customers' growth).

Employee benefits: The impact of the negative performance of the plan assets on the pension plan liability (CHF 0.9 million) was mitigated by the resulting impact of the increase of the discount rate used in the determination of the net defined benefit obligation from 0.35% to 0.40% (- CHF

0.7 million) Overall, the updated actuarial analysis led to an increase of the pension plan liability by CHF 1.1 million (gross of tax) up to a total amount of CHF 19.4 million (31.12.2019: CHF 18.3 million) when taking into account service cost and other costs recognised in profit or loss.

Measurement of the expected credit loss and impairment allowance: Reference is made to Note 11.

Interim report H1 2020

9

Notes to the condensed consolidated interim financial statements

5	Reportable segments
The analysis of reportable segments for the 6 month-period ending 30 June 2020 and 2019 is as follows :
			6 months ended 30 June
		2020			2019
in CHF
Operating income by geography
Securities trading
Switzerland		112,709,010			66,491,404
Europe		8,460,581			3,990,709
Middle East	3,272,525			2,718,386
Others		36,083			-
Subtotal securities trading	124,478,199			73,200,499
Leveraged forex
Switzerland		49,714,049			28,142,013
Europe		1,648,533			1,391,072
Middle East		5,302,913			6,894,071
Others		3,365,324			3,027,321
Subtotal leveraged forex	60,030,818			39,454,477
Total operating income		184,509,017			112,654,976

The geographical split reflects the location of the office that manages the client relationship.

		6 months ended 30 June
	2020			2019
in CHF
Operating income by product
Securities trading
Cash and foreign exchange		41,186,289			27,450,796
Shares, ETFs, structured products and investment funds		65,598,192			28,990,565
Crypto assets	4,845,177			3,175,687
Others		12,848,541			13,583,451
Subtotal securities trading	124,478,199			73,200,499
Leveraged forex
Foreign exchange		34,606,936			25,670,952
Contracts-for-difference		17,079,332			8,180,214
Precious metals		8,344,550			5,603,311
Subtotal leveraged forex		60,030,818			39,454,477
Total operating income		184,509,017			112,654,976

As at 30 June 2020: the Group does not have any client representing more than 10% of its operating income.

Interim report H1 2020

10

Notes to the condensed consolidated interim financial statements

6	Net fee and commission income
			6 months ended 30 June
		2020			2019
in CHF
Brokerage and related income		75,595,841			35,596,997
Custody fees		7,209,840			6,259,714
Other commission income		5,833,011			6,239,279
Advertising and subscription fees		3,496,503			1,856,976
Total fee and commission income		92,135,195			49,952,966
Fee and commission expenses		(8,755,777)			(4,312,442)
Total net fee and commission income		83,379,418			45,640,524

The increase in net fee and commission income was driven by higher brokerage activity, reflecting the effects of the COVID-19 pandemic on financial markets and of strong customer growth identified during the period under review.

Disaggregation of revenues: the total balance of net fee and commission income is allocated to the reportable segment

designated as "Securities trading". Custody fees of CHF 7.2 million (2019: CHF 5.8 million) and advertising and subscription

fees of CHF 3.5 million (2019: CHF 1.9 million) are primarily recognised over time. The remaining balance (brokerage and related income, other commission income) mainly consist of services rendered at a point in time.

Interim report H1 2020

11

Notes to the condensed consolidated interim financial statements

7	Net interest income
									6 months ended 30 June
			Activities excluding
			FX swaps		FX swaps	2020			2019
in CHF
Interest income
Investment securities	2,750,250				-	2,750,250			2,005,086
Loans and due to customers	6,673,001				-	6,673,001			5,211,677
Due from banks	3,864,930						3,864,930			2,578,979
Others		636,009				-	636,009			698,147
Total interest income		13,924,190				-	13,924,190			10,493,889
Interest expense
Cash and balances with central bank,
treasury bills and loans	(2,066,677)			(6,571,231)	(8,637,908)			(11,973,775)
Due to banks and due from banks
(incl. stock exchanges)	(1,662,153)				-	(1,662,153)			(1,342,666)
Due to customers and others	(812,449)				-	(812,449)			(2,198,408)
Total interest expense	(4,541,279)			(6,571,231)	(11,112,510)			(15,514,849)
Other interest income
Derivative financial instruments		-			12,126,963	12,126,963			21,371,330
Total other interest income		-			12,126,963	12,126,963			21,371,330
Other interest expense
Derivative financial instruments		-	(296,533)	(296,533)			(252,375)
Total other interest expense		-			(296,533)	(296,533)			(252,375)
Total net interest income		4,757,204			9,884,906	14,642,110			16,097,995
As at 30 June 2020, negative interest expense impact is as follows:
									6 months ended 30 June
									2020				2019
in CHF
Negative interest on liabilities								1,429,390				498,227
Negative interest on assets								(9,920,176)				(13,166,489)
Total									(8,490,786)				(12,668,262)
Cost of negative interest rates (excluding FX swaps)				(1,919,555)				(5,053,775)

The decrease of the cost of negative interest rates is mainly explained by the increase of exempted amount of cash and balances with Swiss National Bank from CHF 0.8 billion as at 30 June 2019 to CHF 1.7 billion as at 30 June 2020.

Disaggregation of revenues: the total balance of net interest income is allocated to the reportable segment designated as "Securities trading" and is by nature recognised over time.

Interim report H1 2020

12

Notes to the condensed consolidated interim financial statements

8	Net trading income
			6 months ended 30 June
		2020		2019
in CHF
Foreign exchange revenues:
From leveraged forex		60,030,818		39,454,477
From other foreign exchange income		26,598,917		11,352,801
Unrealised fair value gains/losses:
From trading assets		(113,249)		14,679
From others		25,741		94,500
Realised gains/losses:
From trading assets and investment securities		(54,738)		-
Net trading income		86,487,489		50,916,457

The increase in net trading income was primarily driven by higher foreign exchange revenues generated from leveraged forex reportable segment. This was fuelled by strong client acquisition, improved product offering and high levels of volatility due to the COVID-19 pandemic.

Disaggregation of revenues: out of the total balance of net trading income of CHF 86.5 million, CHF 60.0 million were allocated

to the reportable segment designated as "Leveraged Forex (eForex)" (remaining balance of CHF 26.5 million: Securities trading). Net trading income is by nature recognised at a point in time.

9	Operating expenses
			6 months ended 30 June
		2020		2019
in CHF
Payroll and related expenses		50,070,512		40,712,956
Other operating expenses		22,329,312		19,416,115
Marketing expenses	10,936,883		10,765,298
Depreciation and amortisation	14,210,019		12,670,298
Provisions		4,736,472		3,580,268
Total			102,283,198		87,144,935

Payroll and related expenses comprise of an amount of CHF 9.5 million related to variable remuneration (2019: CHF 4.7 million).

Interim report H1 2020

13

Notes to the condensed consolidated interim financial statements

10 Earnings per share

Basic

		6 months ended 30 June
	2020		2019
Weighted average number of ordinary shares in issue	14,890,143		14,870,735
Net profit (CHF)		50,386,560		22,048,180
Earnings per share (CHF)		3.38		1.48
Diluted
		6 months ended 30 June
	2020		2019
Weighted average number of ordinary shares	14,890,143		14,870,735
Adjustments for share options		136,804		62,682
Weighted average number of ordinary shares for diluted earnings per share options		15,026,947		14,933,417
Net profit (CHF)		50,386,560		22,048,180
Diluted earnings per share (CHF)		3.35		1.48

Interim report H1 2020

14

Notes to the condensed consolidated interim financial statements

11 Impairment loss allowance

The following table explains the changes in the impairment loss allowance during the period:

										6 months ended 30 June
		Stage 1		Stage 2		Stage 3	Total	2020	2019
Movements, gross of tax, that doreduce
the carrying amount of financial assets:
Impairment allowance under IFRS 9
as at 1 January 2020		1,805,722		-		30,682,417	32,488,139	-	-
Transfers from stage 1 to stage 3		-		-		23,478,396	23,478,396	(23,478,396)		-
Transfers from stage 1 to stage 2		(4,414)		95,109		-	90,695	(90,695)	(499,982)
Derecognitions and new purchases		348,370		-		-	348,370	(348,370)	(89,165)
Changes in assumptions (PD, EAD and LGD)		(193,634)		-		-	(193,634)	193,634	172,850
Other movements1		-		-		(353,188)	(353,188)	(63,748)	(35,118)
Impairment allowance under IFRS 9
as at 30 June 2020	1,956,044	95,109	53,807,625	55,858,778	-	-
Movements, gross of tax, that do not
reduce the carrying amount of financial
assets:
Impairment allowance under IFRS 9
as at 1 January 2020		8,646		-		-	8,646	-	-
Derecognitions		(2,874)		-		-	(2,874)	2,874	35,019
Changes in assumptions (PD, EAD and LGD)		2,785		-		-	2,785	(2,785)	7,026
Total as at 30 June 2020		1,964,601		95,109		53,807,625	55,867,335	-	-
Total as at 1 January 2020		1,814,368		-		30,682,417	32,496,785	-	-
Credit loss expense										(23,787,486)		(409,370)

1 Other movements may comprise of both amounts with and without impact to the credit loss expense line item (write-off, foreign exchange impact, etc.).

The effects of the COVID-19 pandemic on the global economy is rather uncertain and financial markets have witnessed turmoil and intense volatility. Volatile market conditions produced significant additional operating income to the Group. During the period under review, various market events also produced credit loss expense for an amount of CHF 23.8 million (2019: CHF 0.4 million).

Interim report H1 2020

15

Notes to the condensed consolidated interim financial statements

12 Information technology systems

		Software			Hardware &
		third-party licences	Proprietary software		telecom systems		Total
in CHF
6 months ended 30 June 2020
Opening net book amount	4,322,484		48,122,835	3,245,605	55,690,924
Addition and others	398,917		12,336,847	2,328,688	15,064,452
Amortisation/depreciation		(631,281)		(9,311,230)		(1,084,452)		(11,026,963)
Closing net book amount	4,090,120		51,148,452	4,489,841	59,728,413
6 months ended 30 June 2019
Opening net book amount		2,581,248		45,504,538		3,345,904		51,431,690
Addition and others		421,584		9,007,090		1,005,814		10,434,488
Addition through acquisition	121,866		-		-	121,866
Amortisation/depreciation		(586,340)		(8,625,438)		(971,550)		(10,183,328)
Closing net book amount		2,538,358		45,886,190		3,380,168		51,804,716

Additions to information technology systems include an amount of CHF 7.0 million (2019: CHF 6.4 million) representing own costs capitalised in connection with the development of the systems of the Group.

13 Property, plant and equipment

				Right-of-use	Leasehold
		Land & building	assets	improvements	Equipments	Total
in CHF
6 months ended 30 June 2020
Opening net book amount		54,563,119	12,608,213	1,722,545	1,562,121	70,455,998
Addition and others		1,289,639	1,448,864	350,204	140,573	3,229,280
Amortisation/depreciation		(1,130,605)	(1,601,525)	(238,982)	(123,333)	(3,094,445)
Closing net book amount as at 30 June 2020		54,722,153	12,455,552	1,833,767	1,579,361	70,590,833
6 months ended 30 June 2019
Opening net book amount	56,669,024	-	1,163,156	1,202,387	59,034,567
Changes on initial application of IFRS 16		-	9,169,162	-	-	9,169,162
Adjusted opening net book amount		56,669,024	9,169,162	520,072	762,721	60,169,175
Addition and others		104,347	425,635	535,076	230,832	1,295,890
Addition through acquisition		-	4,898,479	-	347,672	5,246,151
Amortisation/depreciation		(1,132,813)	(916,905)	(152,110)	(196,531)	(2,398,359)
Closing net book amount as at 30 June 2019		55,640,558	13,576,371	1,546,122	1,584,360	72,347,411

Interim report H1 2020

16

Notes to the condensed consolidated interim financial statements

14 Fair value of assets and liabilities

The following table presents the hierarchy of assets and liabilities that are measured at fair value, as well as carrying value of assets and liabilities that are not measured at fair value.

		Level 1	Level 2		Level 3	Fair value		Carrying amount
in CHF
As at 30 June 2020
Assets measured at fair value
Derivative financial instruments		28,527,417	36,553,498		-	65,080,915	65,080,915
Trading assets		6,840,544	-		-	6,840,544	6,840,544
Investment securities		14,666,102	11,358,107		-	26,024,209	26,024,209
Other assets (precious metals)		26,299,435	-		-	26,299,435	26,299,435
Total assets measured at fair value		76,333,498	47,911,605		-	124,245,103	124,245,103
Assets not measured at fair value
Cash and balances with central
bank									2,925,236,930
Treasury bills and other eligible
bills										716,452,528
Due from banks										2,165,541,463
Loans									416,607,386
Investments securities		221,460,032	254,804,766		-	476,264,798	468,043,124
Deferred income tax assets										2,987,175
Intangible assets										45,525,199
Information technology systems										59,728,413
Property, plant and equipment									70,590,833
Other assets									33,942,592
Total assets not measured at fair
value		221,460,032	254,804,766		-	476,264,798	6,904,655,643
Total assets	297,793,530	302,716,371		-	600,509,901	7,028,900,746
Liabilities measured at fair value
Derivative financial instruments	7,248,571	37,217,845		-	44,466,416	44,466,416
Total liabilities measured at fair
value	7,248,571	37,217,845		-	44,466,416	44,466,416
Liabilities not measured at fair
value
Deposits from banks										300,973,857
Due to customers										6,167,462,166
Other liabilities										90,435,896
Current income tax liabilities									5,726,561
Deferred tax liabilities									1,082,033
Provisions									7,342,192
Total liabilities not measured at
fair value		-	-		-	-	6,573,022,705
Total liabilities		7,248,571	37,217,845		-	44,466,416	6,617,489,121

Interim report H1 2020

17

Notes to the condensed consolidated interim financial statements

14 Fair value of assets and liabilities (continued) a Assets measured at fair value

Investment securities measured at fair value comprise of financial assets at fair value through profit or loss (30 June 2020: CHF 6.5 million, out of which CHF 1.0 million classified as level 2), financial assets at fair value through other comprehensive income (30 June 2020: CHF 10.4 million, all classified as level 2) and financial assets at fair value through other comprehensive income equities (30 June 2020: CHF 9.1 million, out of which none classified as level 2).

1. Financial assets and liabilities not measured at fair value
   Investment securities not measured at fair value comprise of investment securities classified as amortised cost. For all other financial assets and liabilities not measured at fair value, the carrying amount is assessed to be a reasonable approximation of fair value.

Interim report H1 2020

18

Notes to the condensed consolidated interim financial statements

14 Fair value of assets and liabilities (continued)

		Level 1	Level 2		Level 3	Fair value		Carrying amount
in CHF
As at 31 December 2019
Assets measured at fair value
Derivative financial instruments		42,244,517	55,514,501		-	97,759,018	97,759,018
Trading assets		5,949,451	-		-	5,949,451	5,949,451
Investment securities		5,685,593	19,677,018		-	25,362,611	25,362,611
Other assets (precious metals)		23,992,647	-		-	23,992,647	23,992,647
Total assets measured at fair value		77,872,208	75,191,519		-	153,063,727	153,063,727
Assets not measured at fair value
Cash and balances with central
banks									2,871,118,650
Treasury bills and other eligible
bills										439,206,719
Due from banks										2,159,429,953
Loans									338,672,203
Investments securities		164,448,068	148,720,724		-	313,168,792	309,573,665
Deferred income tax assets										3,466,758
Intangible assets										45,727,825
Information technology systems										55,690,924
Property, plant and equipment									70,455,998
Other assets									26,301,636
Total assets not measured at fair
value		164,448,068	148,720,724		-	313,168,792	6,319,644,331
Total assets	242,320,276	223,912,243		-	466,232,519	6,472,708,058
Liabilities measured at fair value
Derivative financial instruments	5,577,709	53,363,115		-	58,940,824	58,940,824
Total liabilities measured at fair
value	5,577,709	53,363,115		-	58,940,824	58,940,824
Liabilities not measured at fair
value
Deposits from banks										129,920,394
Due to customers										5,813,524,509
Other liabilities										86,124,178
Current income tax liabilities									2,913,765
Deferred tax liabilities									937,160
Provisions									5,589,838
Total liabilities not measured at
fair value		-	-		-	-	6,039,009,844
Total liabilities		5,577,709	53,363,115		-	58,940,824	6,097,950,668

Interim report H1 2020

19

Notes to the condensed consolidated interim financial statements

14 Fair value of assets and liabilities (continued) c Assets measured at fair value

Investment securities measured at fair value comprise of financial assets at fair value through profit or loss (31 December 2019: CHF 4.0 million, out of which none classified as level 2), financial assets at fair value through other comprehensive income (31 December 2019: CHF 19.7 million, out of which CHF 19.7 million classified as level 2) and financial assets at fair value through other comprehensive income equities (31 December 2019: CHF 1.7 million, out of which none classified as level 2).

1. Financial assets and liabilities not measured at fair value
   Investment securities not measured at fair value are all classified as amortised cost. For all other financial assets and liabilities not measured at fair value, the carrying amount is assessed to be a reasonable approximation of fair value.

Interim report H1 2020

20

Report on the Review

of condensed consolidated interim financial statements to the Board of Directors of Swissquote Group Holding Ltd

Gland

Introduction

We have reviewed the condensed consolidated interim financial statements (statement of financial position, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes) (pages 1 to 20) of Swissquote Group Holding Ltd for the period ended 30 June 2020. The Board of Directors is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with International Accounting Standard 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.

Scope of Review

We conducted our review in accordance with Swiss Auditing Standard 910 and International Standard on Review Engagements 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Swiss Auditing Standards and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting".

PricewaterhouseCoopers SA

Beresford Caloia

George Okroashvili

Lausanne, 6 August 2020

PricewaterhouseCoopers SA, avenue C.-F. Ramuz 45, case postale, CH-1001 Lausanne, Switzerland Téléphone: [phone], Téléfax: [phone], www.pwc.ch

PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Interim report H1 2020

21

Global presence services

Geneva, Zurich, Bern

Swissquote Bank Ltd

London

Swissquote Ltd

Dubai

	Swissquote MEA Ltd,	Hong Kong
Luxembourg	Swissquote Bank Ltd	Swissquote Asia Ltd,
Swissquote Bank Europe SA	Rep. Office	Swissquote Bank Ltd
	Malta	Rep. Office

Swissquote Financial

Services (Malta) Ltd

Singapore

Swissquote Pte. Ltd

eForex services

eTrading services

Robo-Advisory services

Fund custody services

eTrading services, Robo-Advisory services and Fund Custody services are included in the securities trading reportable segment.

Interim report H1 2020

22

Swissquote offices

Switzerland		Middle East
Swissquote Group Holding Ltd	Swissquote MEA Ltd
Swissquote Bank Ltd	Al Fattan Currency House
Chemin de la Crétaux 33	Level 9, Office 903
Case postale 319		Tower 2, DIFC
CH-1196 Gland		P.O. Box 121364
		Dubai, United Arab Emirates
Telephone:	[phone]
Fax:	[phone]	Telephone:	[phone]
www.swissquote.ch		Fax:	[phone]
		www.swissquote.ae
Branches and other offices
Löwenstrasse 62		Europe
Postfach 2017		Swissquote Ltd
CH-8021 Zurich		Boston House, 63-64 New Broad Street
		EC2M 1JJ London
Schauplatzgasse 9		United Kingdom
CH-3011 Bern
		Telephone:	[phone]
Telephone:	0848 25 88 88	Fax:	[phone]
Fax:	[phone]	www.swissquote.eu
Tel. from abroad:	[phone]
www.swissquote.com	Swissquote Financial Services (Malta) Ltd
		Palazzo Spinola
Asia		46 St. Christopher's Street
Swissquote Asia Ltd	Valletta, Malta
Suites 3202-04, Level 32/F	Malta
ICBC Tower, 3 Garden Road
Central, Hong Kong		Telephone:	[phone]
		www.swissquote.mt
Telephone:	[phone]
Fax:	[phone]	Swissquote Bank Europe SA
www.swissquoteasia.com	2 Rue Edward Steichen
		2958 Luxembourg
Swissquote Pte. Ltd		Luxembourg
One Raffles Quay #25-08/10
North Tower Singapore	Telephone:	[phone]
Singapore 048583		www.swissquote.lu
Telephone:	[phone]

Interim report H1 2020

23

www.swissquote.com

Geneva - Zurich - Bern - London - Dubai - Malta - Hong Kong - Luxembourg - Singapore