Two UK-based subsidiaries of the U.S. market-making giant Citadel Securities have published their financial results for 2023, revealing a combined profit increase of 35% compared to the previous year. While one branch saw a slight decline in performance, the other delivered strong results, driving overall growth.
Revenue and Profit Growth at Citadel Securities UK
The financial reports for Citadel Securities (Europe) Limited and Citadel Securities Finance (UK) Limited, two subsidiaries of Citadel Securities Group, were recently made available through the UK’s Companies House.
Citadel Securities (Europe) Limited, which specializes in providing liquidity and market-making services in equities and futures, as well as trading algorithms and portfolio management within the group, reported revenue of $432 million. This marks a decline from the previous year’s $499 million. However, despite lower expenses, total comprehensive income fell by just 0.5%, landing just under $113 million. The decrease in income and operating expenses followed a corporate restructuring that transferred staff to related Citadel entities.
Despite this dip, the entity’s performance was supported by an increase in trading revenues, spurred by higher trading volumes in key markets. Citadel Securities (Europe) Limited saw its operating profit grow to $151 million for the year.
In contrast, Citadel Securities Finance (UK) Limited, which focuses on proprietary investments in financial instruments and provides treasury and cash management services within the group, reported stronger results. The company’s total income reached $1.8 billion, a significant increase from $1.2 billion in 2022. Although operating costs rose sharply to $906 million from $520 million, total comprehensive income surged by more than 35%, hitting $790 million, up from $575 million the previous year.
The report further highlighted that Citadel Securities Finance (UK) Limited saw an increase in shareholder equity, rising to $1.9 billion, while long-term debt, including accrued interest, decreased to $9.5 million.
Combined, the two UK entities reported an income exceeding $900 million.
Citadel Securities’ Regulatory History
In 2022, Citadel Securities faced regulatory scrutiny when the U.S. Securities and Exchange Commission (SEC) imposed a $7 million fine for violations of Regulation SHO, which governs short-selling practices. The SEC discovered that Citadel Securities had incorrectly marked millions of sales orders over a five-year period due to a coding error in its automated trading system, leading to misclassified short and long sales. The firm inadvertently provided inaccurate data to regulatory bodies, including the SEC.
This penalty followed earlier regulatory action in which the Financial Industry Regulatory Authority (FINRA) fined Citadel Securities $275,000 for reporting failures.
