London Capital Group Limited is a victim of the troubled FlowBank, but its board is working to see profitability in 2024. The company reported a notable revenue increase in 2022, but the net loss escalated by 30%.
LCG Net Loss Deepens in 2022
The FlowBank-owned London Capital Group Limited undertakes LCG’s UK operations. However, the holding company was liquidated in June 2024 after the Swiss regulator’s decision.
The British FCA temporarily restricted LCG, stopping new client onboarding or receiving funds from them, but it removed the impediment in mid-July. However, the parent company’s bankruptcy is affecting the entity. The Bahamas branch is closed, and FlowBank’s issues are directly linked to the closure.
LCG UK is releasing its 2022 financial results, while other companies publish their 2023 reports. According to its latest report in Companies House, its revenue rose by 25% to almost £2 million from £1.6 million.
Nevertheless, the entity reported a £3.7 million loss, down by almost £2 million from 2021 figures. Consequently, the 2022 net loss was £2.4 million, a rise from the previous year’s £1.7 million.
The report explains that revenue generation for the accounting period was based on a ‘back-to-back’ plan with FlowBank, which saw the company hedge its risk one-for-one with the bank. Consecutively, FlowBank paid LCG trading volume generation fees.
According to the report’s forecasts, the LCG board intends to restore the company to profitability in 2024.
LCG UK Buyer Hunt
Late last month, FlowBank liquidators issued a letter expressing their intention to sell the total stake in LCG UK and end operations of its affiliated Bahamas entity.
Walder Wyss Ltd liquidators are looking for a potential purchaser to acquire all the LCG UK shares but wish to discontinue the LCG Bahamas operations.
The liquidators also wish to end LCG Bahama’s activities. Recent updates state that FlowBank had about 9,000 secured deposit accounts totaling approximately CHF 53.5 million. As of last week, the liquidators had used almost CHF 45 million to reimburse about 5,800 accounts, translating to roughly 84% of total secured deposits.
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