London-based CMC Markets has announced a new partnership Down Under to make it the second largest stockbroker in Australia.
The spreadbetting group will service more than 500,000 retail stockbroking clients of the Australia and New Zealand Banking Group (ANZ) when the deal is completed.
Gross revenue from CMC’s stockbroking business is expected to increase by AU$40m (£25m) as a result of the tie-up. Analysts at Numis, who said the deal “appears to be very sensible”, estimated this could contribute around £4m to group profits.
Shares in CMC Markets leapt six per cent to 128p on the news on Wednesday morning.
“I am delighted to announce a significant transaction for the CMC Group which will result in our Australian stockbroking business becoming the clear number two online broker in Australia,” said CMC chief executive Peter Cruddas.
“ANZ is a high-quality partner with whom we have an excellent relationship and this transaction demonstrates their confidence in CMC’s technology capability, the quality of our people and our commitment to Australia.
“I particularly look forward to welcoming ANZ staff as part of the CMC team in due course.”
The agreement, which is not subject to regulatory or shareholder approval, will see CMC service the bank’s entire client base by September next year.
CMC will provide technology, customer service and execution through an ANZ-branded stockbroking platform. CMC will charge ANZ a fixed price per trade.
It has been a tough couple of months in the UK for CMC and its spreadbetting rivals. In December, the Financial Conduct Authority (FCA) announced plans to crack down on firms selling “contract for difference” (CFD) products, such as spreadbets for retail customers.
CMC is understood to be considering moving its headquarters away from London as a result of the clampdown.