Forex Broker News: GKFX UK Stems Losses After Halting Retail

• The forex broker GKFX UK managed to lower its losses significantly by around 75% for FY2020
• Revenues dropped substantially after the broker halted its retail services
• The loss figure came in at £2.88 million when compared to £8.68 million for FY2019

The road to recovery seems to have begun for the forex broker GKFX Financial Services Ltd. The UK unit of the Global Kapital Group filed its accounts for the year ended at Companies House with pre-tax losses coming in at £2.88 million. This was a huge improvement from the loss of £8.68 million for the previous year.

These latest results are the first time that full-year financials were released by the UK subsidiary. This operates the GKPro brand after a complex operation where it migrated all retail clients to its sister companies. The forex broker shifted its focus completely on wholesale and professional clients.

However, the absence of retail traders had a significant effect on the revenues of the forex broker. These were down to £2.66 million when compared to £3.6 million in the previous year.

“Revenues are generated predominantly through a volume rebate with a counterparty that is related to GKFX Financial Services by common ownership. The risk management strategy is based on highly automated flow management which dynamically hedges client exposure and risk,” the broker explained in a note accompanying the filing.

The note also pointed out that the level of revenues is influenced by the volume of trades executed on behalf of the Company’s only client.

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Forex Broker GKFX UK Slashes Expenses To Reduce Losses By A Remarkable Margin

Although the forex broker saw a considerable decline in its yearly revenue, this loss was reduced significantly through a number of cost-cutting exercises. These included cutting cost of sales by half as well as reducing administrative expenses. These dropped by more than half, from £11.8 million to £5.78 million.

“Revenues reduced as the retail business was curtailed and expenses decreased primarily as lower staffing levels were required to support the much smaller ongoing client base,” the broker explained.
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GKFX Closes UK Branch But Continues Aggressive International Expansion

Although GKFX ceased its retail operations in the UK, this does not mean that it has stopped its international expansion. Actually, this is expanding at a rapid pace with an aggressive plan.

Earlier this year, the brokerage group managed to secure an operational license from the Mauritius regulator for the continued expansion of its global services. GKFX also managed to acquire a FINRA registered broker which heralds its entry into the all-important US market.

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