Futu Holdings Ltd. (FUTU), a financial services provider, on Thursday reported a steep decline in net income, mainly due to fines, penalties, and increased total operating expenses. However, the company registered an increase in revenue, helped by improved interest income.
For the three-month period to March 31, the company posted a net income of HK$830.985 million, compared with HK$2.142 billion in the same period last year. Net earnings per share were HK$0.75, less than HK$1.91 per share a year ago.
Futu posted a net income of HK$6 per ADS, as against HK$15.28 per ADS last year.
Excluding items, profit stood at HK$919.531 million as against the prior year's HK$2.216 billion.
Income from operations was HK$3.530 billion, higher than HK$2.685 billion last year.
The result reflects proposed penalties of approximately RMB 470 million, and fines of approximately RMB1.38 billion, in an aggregate amount of approximately RMB1.85 billion. The total other expenses were HK$2.133 billion, compared with HK$20.598 million a year ago. As previously announced, the company received a notice from the China Securities Regulatory Commission and its Shenzhen Bureau which proposed penalties on the relevant Futu entities in mainland China and Hong Kong for conducting certain regulated business activities without licenses.
Total operating expenses moved up to HK$1.576 billion from HK$1.260 billion in the previous year.
Revenue stood at HK$5.855 billion, up from HK$4.694 billion in the previous year, of which interest income was HK$2.650 billion, higher than HK$2.070 billion a year ago.
FUTU was down by 1.29% at $108.80 in the pre-market trade on the Nasdaq.
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