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Good morning, everyone. Welcome to IG's Q3 Revenue Update. The clue is in the title. This is a revenue update rather than anything else in particular. If we did have any other changes which changed our previous guidance we would of course have put them in there, with regard to costs and so forth.Trading revenue was strong, as everyone knows, up 30% from the same period in the prior year to GBP 153 million, which was a good result. We are pleased in particular by the change in revenue per client amongst the leveraged trading clients, which represents our long-term push to have fewer better clients, which appears to be working its way through. You will all also have noticed the 11% of revenue which came from clients trading cryptocurrency during the period, which was up from 1% in the previous quarter. We do highlight the fact that it has slowed markedly since the end of January. The final point I'll make before handing this over to questions, is that we are expecting an announcement from ESMA soon, as we put in the result after their short call to evidence, which they did in January. And I'll now hand this over to questions.
[Operator Instructions] Our first question is from Alistair Ross from Investec.
Just a quick 1 for me. In terms of the professional client base that has now elected to be professional. How is that process going, a process that you've sort of started in November last year?
Alistair, morning. It's Peter. The process is going exactly as we expected and exactly as we talked about to everyone when we did our January update. If it had not been going as expected in the right direction, we would have updated as part of this update.
Our next question is from Paul McGinnis from Shore Capital.
Couple of quick ones. Just on the point on crypto. Could you give us your thoughts on why things would have slowed down, in particular, since the end of January? Was the first one. And then, just with respect to the ESMA announcement. Have you got any reason in terms of the nature of inquiries to believe that the outcome will be anything other than what was in the, kind of the original proposals back in December?
Fine. I'll take the crypto one first. I think the crypto mania, I think, peaked as we approached Christmas. And then if you look at the interest from clients, it has fallen away pretty markedly since then, whichever measure you track, whether it's the price of crypto or whether it's the volume of searches on the Internet for crypto trading terms or any other combination, I think you'd say that the wave has to a large degree passed in terms of client interest. And whilst the price of crypto is still volatile by any normal standard, it's a tiny fraction of the volatility that you were seeing in the so-called asset class in the period around Christmas and in January. So I'd just say, it's stopped moving anything like as much, although, it's still moving a lot, and client interest has fallen away a great deal, both from informed and less-informed clients. And as a result, the amount of people trading on the asset class has fallen very considerably since the end of January. That's not to say it will never restart, but I think absent the price of crypto changing a great deal, probably up, it's not going to be massively significant for the foreseeable. So that's the crypto answer. On the ESMA answer. No, we're not giving any update whatsoever as to whether or not we believe the proposals have changed in any material way.
Our next question is from Ian White from Autonomous Research.
I had just 1 please, on the sort of performance of the business excluding cryptocurrency. And if I kind of adjust your leveraged OTC revenue for the 11% you mentioned came from cryptocurrency and then look at your average revenue per user on that basis ex crypto, it's much closer to kind of what you reported in the first couple of quarters of the year. And I wondered if you were surprised by that given that the VIX, for example, is up 40% average daily volatility 3Q on 2Q. Whether you'd have expected to have seen a bigger improvement in revenue per user ex that crypto piece? If you could just -- maybe if you could just give us a few of your thoughts around that, please, that would be of interest?
Fine, thank you. I'll give you 2, if I may. The first one is that it's a bit harsh to fully sub out the impact of crypto, because clients have a finite amount of money on their accounts. And if they're choosing to deploy their deposits in trading crypto, and if they're choosing to engage with the subject and research and analyze crypto and do everything else, that takes away their ability to do something else and to trade another asset class, whether that's because of financial constraints or whether that's because of time or interest constraints. So my personal view is that it's wrong to assume that all of the crypto revenue would be substituted to something else, but it's also wrong to assume that none of the crypto revenue would be substituted to anything else. And a fairer answer would be to take somewhere in the middle and assume that, that transferred, and I can't help you because it's a complete guess as to what percentage of it you might sub out. But I think the simple arithmetic "let's ignore crypto" is a bit harsh, if I'm being honest. The second question was around -- yes, if you do sub out all the crypto, which we just discussed, would it be fair to say that the performance wasn't that great? Given the first caveat, it's difficult. The second thing I'd say is, yes, we did get some volatility in the main equity markets in the period for sure. But it was a relatively sustained, quite violent burst rather -- a relatively short burst is what I'm trying to say, rather than a sustained amount of interest across the period. And like any other sort of internalizing brokerage-type model, we'd have much preferred a lower level for a longer period rather than the very short concentrated burst that we had. Does that answer your question in any way?
It does.
We have a follow-up question from Alistair Ross from Investec.
Just a quick 1 on ESMA's call for evidence. Can you give us a bit of a flavor as to how that's going? And what you've sort of seen through that process? Obviously, at the last set of results, you gave us a bit of a flavor for that. It seems like there is -- they are inundated with responses as far as I can tell, then if you've got anything to add?
Very, very little, Alistair. I mean, the only thing I would say is the Board of Supervisors, which is the head of all of the national competent authorities, so the head of the FCA, the head of BaFin, and the head of the AMF, et cetera, are meeting today and tomorrow and that is the first time that they have met as a group since the call for evidence ended. And they are the decision-making body for any changes to the regulation and the use of product intervention powers. And obviously that's as far as I can go.
We have a question from Mark Thomas from Hardman & Co.
I was just wondering if you could give any indication as to those new customers that came on perhaps just trading through cryptos initially, what proportion are now trading other asset classes?
Okay. I'll just repeat the question because it's quite muffled. I think the question was, please correct me if I'm wrong, Mark. Of the clients who came in purely to trade crypto, what proportion of those have now moved on to trading anything else? And I'm going to throw this one to Paul, if he doesn't mind.
I do mind, given that I don't actually have the answer to that in particular. And from what I do know, looking at the stats here, the number of people who came in, new clients who traded for the first time in the quarter, who traded crypto for the first time was a little higher than the 11% of revenue that came from crypto in the quarter as we know. So a little bit more than 11% are first trades, people who came in, who traded crypto for the first time. I don't know how many of those then went on to trade in other asset classes. I would imagine most of them.
As would I.
[Operator Instructions] Peter, we have no further questions. I'll hand the presentation back to you.
Well, I'll just wrap it up then guys. Thank you very much for your time. We'll be sending an update at some point.
And I'm available if anyone has any further questions, that's Liz Scorer, you should have my details.
Thank you all very much.