⚠ The Regulator Sets the LeverageHigh threat

XTB (XTB) — threat to the moat

The most important input into this revenue line is not a market variable - it is a number set by a committee, and the committee has moved it before.

The most important input into XTB's revenue is not a market variable. It is the maximum leverage a European retail client may be offered, and it is set by a committee.

The ESMA leverage cap, and what followed, PLN m73,1Q3 2017 income47,6Q3 2018 income31,3Q3 2017 profit6,2Q3 2018 profit288,3FY2018 income239,3FY2019 incomeRetail leverage capped at 30:1 from 1 August 2018; a 9,9m fine took Q3 to a net loss
Nothing about the business changed. A rule changed, and two fifths of the profit went.

The European Securities and Markets Authority imposed binding limits from 1 August 2018, capping retail leverage at 30:1 on the most liquid instruments and considerably lower elsewhere.1 XTB's third quarter of 2018 produced operating income of 47,6 million złoty against 73,1 million a year earlier, a fall of 35 per cent, and profit of 6,2 million against 31,3 million, a fall of 80 per cent; with a 9,9 million administrative fine from the Polish supervisor in the same quarter the group reported a net loss of 2,9 million.2 The damage ran into the following year: full-year operating income fell from 288,3 million złoty in 2018 to 239,3 million in 2019, and net profit from 101,5 million to 57,7 million.3

Nothing about the business had changed. The clients were the same, the platform was the same, the marketing was the same. A rule changed how large a position a given deposit could support, and roughly two fifths of the earnings went with it.

The limits have not been loosened since, and there is no reason to expect they will be. The direction of European retail-investor regulation over two decades has been one way, and the current agenda includes a ban on payment for order flow from June 2026 and a continuing debate about the marketing of leveraged products.4

What makes this a live threat rather than history is that XTB is now much larger, more European and more visible than it was in 2018, and the product mix is more concentrated in contracts for difference than the branding suggests: 96 per cent of gross gain in 2025.5

The number that quantifies it is the 2018 comparison. A 35 per cent revenue fall applied to the current run rate is more than a billion złoty a year.

References
  1. ReportedThe European Securities and Markets Authority imposed binding limits from 1 August 2018, capping retail leverage at 30:1 on the most liquid instruments and considerably lower elsewhere.
    XTB third-quarter 2018 results as reported by Finance Magnates - total operating income was PLN 47,6 million, a 35 per cent fall from PLN 73,1 million in the same period of 2017; profit fell by 80 per cent year on year from PLN 31,3 million in 2017 to PLN 6,2 million; total revenues from CFDs were PLN 47,3 million excluding a fine, against PLN 72,5 million a year earlier; currency CFD revenue of PLN 10,4 million was PLN 18,9 million or 64 per cent lower and commodity CFD revenue of PLN 27,9 million was PLN 22,3 million or 80 per cent higher; the broker received an administrative fine from the Polish Financial Supervision Authority of PLN 9,9 million, taking the quarter to a consolidated net loss of PLN 2,9 million; the European Securities and Markets Authority's rules effective from 1 August 2018 reduced leverage for retail customers to 30:1 or lower depending on the underlying asset — Q3 2018 · publ. 2018 · source ↗
  2. ReportedXTB's third quarter of 2018 produced operating income of 47,6 million złoty against 73,1 million a year earlier, a fall of 35 per cent, and profit of 6,2 million against 31,3 million, a fall of 80 per cent; with a 9,9 million administrative fine from the Polish supervisor in the same quarter the group reported a net loss of 2,9 million.
    XTB third-quarter 2018 results as reported by Finance Magnates - total operating income was PLN 47,6 million, a 35 per cent fall from PLN 73,1 million in the same period of 2017; profit fell by 80 per cent year on year from PLN 31,3 million in 2017 to PLN 6,2 million; total revenues from CFDs were PLN 47,3 million excluding a fine, against PLN 72,5 million a year earlier; currency CFD revenue of PLN 10,4 million was PLN 18,9 million or 64 per cent lower and commodity CFD revenue of PLN 27,9 million was PLN 22,3 million or 80 per cent higher; the broker received an administrative fine from the Polish Financial Supervision Authority of PLN 9,9 million, taking the quarter to a consolidated net loss of PLN 2,9 million; the European Securities and Markets Authority's rules effective from 1 August 2018 reduced leverage for retail customers to 30:1 or lower depending on the underlying asset — Q3 2018 · publ. 2018 · source ↗
  3. ReportedThe damage ran into the following year: full-year operating income fell from 288,3 million złoty in 2018 to 239,3 million in 2019, and net profit from 101,5 million to 57,7 million.
    X-Trade Brokers Dom Maklerski S.A. Group annual report for 2019 - financial highlights for the twelve months ended 31 December 2019 and 31 December 2018: total operating income 239 304 and 288 301; profit on operating activities 65 412 and 115 809; profit before tax 69 436 and 124 671; net profit 57 701 and 101 471; net profit per share 0,49 and 0,86 złoty; total assets 1 138 900 and 970 074; salaries and employee benefits (86 024) and (78 478); marketing (37 716) and (33 322); other external services (24 638) and (24 909); total operating expenses (173 892) and (172 492); segment results for 2019 with retail operations producing total operating income of 218 457 and operating profit of 49 021 against institutional operations at 20 847 and 16 391; the average number of employees in the Group was 434 persons in 2019 and 391 persons in 2018 — FY2018-FY2019 · publ. 2020 · source ↗
  4. ReportedThe direction of European retail-investor regulation over two decades has been one way, and the current agenda includes a ban on payment for order flow from June 2026 and a continuing debate about the marketing of leveraged products.
    XTB Group Management Board report on activities in 2025, business model and competitive landscape - the model "combines the features of an agency model with a market maker model, in which the Company is a party to transactions concluded and initiated by clients"; "XTB operates as a market-maker, meaning it is the counterparty to a client's transaction"; "XTB executes all transactions in shares, ETFs, and CFDs based on these assets directly on regulated markets or alternative trading systems. XTB is not a market maker for this class of instruments"; the competitive environment divided into trading platform providers (eToro, Trading 212, Robinhood), fintech companies (Trade Republic, Scalable Capital, Revolut) and CFD-only brokers (Plus500, IG Group, CMC Markets, Saxo Bank), with Polish bank-affiliated brokerages named as mBank Biuro Maklerskie, Santander Biuro Maklerskie, Dom Maklerski Banku Ochrony Srodowiska (BOSSA), PKO BP Biuro Maklerskie, ING Securities and Bank Pekao S.A. Biuro Maklerskie, and XTB described as a market leader in Poland; the planned European ban on the payment-for-order-flow model from 2026; key competitive advantages listed as a wide product range including stocks, ETFs, Investment Plans and CFDs plus interest on free funds, an eWallet with a multi-currency card and long-term savings accounts IKE (Poland), ISA (United Kingdom) and PEA (France); the proprietary xStation platform and XTB mobile app; no commissions up to EUR 100 000 turnover on stocks and ETFs and no withdrawal fees; operations in over 15 countries; regulation by nine financial authorities including the FCA and KNF; client fund segregation; 24/5 support; and the XTB Academy. Brand ambassadors Mads Mikkelsen (2016-2018), Conor McGregor and Iker Casillas (2022-2024) and Zlatan Ibrahimovic (2024-2026); nearly PLN 585 million allocated to marketing in 2025, up 69,6%, including the largest campaign in the group's history launched in September 2025 across 13 markets including Poland, France, Germany, the United Kingdom, Chile, the Middle East and Indonesia, and sponsorship at Roland Garros and Wimbledon; the XTB brand dating from 2009 and the word "trading" replaced by "investing" in 2023 — FY2025 · publ. March 2026 · source ↗
  5. ReportedWhat makes this a live threat rather than history is that XTB is now much larger, more European and more visible than it was in 2018, and the product mix is more concentrated in contracts for difference than the branding suggests: 96 per cent of gross gain in 2025.
    XTB Group consolidated financial statements for 2025, comprehensive income statement and revenue notes - total operating income 2 146 056 against 1 873 436; income from fees and charges 20 287 against 12 291; other income 3 198; marketing (584 898) against (344 808); salaries and employee benefits (413 019) against (311 574); commission expenses (107 415) against (97 289); other external services (132 846) against (79 226); amortisation and depreciation (25 405) against (19 905); taxes and fees (15 955) against (13 109); costs of maintenance and lease of buildings (10 559) against (7 999); other costs (23 580) against (12 791); total operating expenses (1 313 677) against (886 701); profit on operating activities 832 379 against 986 735; finance income 39 603 against 62 845 including interest income on financial instruments at amortized cost 26 538 and income on bonds 12 744 against 26 138 and foreign exchange gains of nil against 10 307; finance costs (94 594) against (1 129), of which foreign exchange losses (93 125) against nil, relating to unrealised differences on the measurement of balance sheet items denominated in a currency other than the functional currency; profit before tax 777 388 against 1 048 451; income tax (133 189) against (191 595); net profit 644 199 against 856 856; basic earnings per share 5,48 against 7,29. Result of operations in financial instruments by class for 2025 and 2024: Commodity CFDs 923 714 and 896 672; Index CFDs 760 736 and 622 728; Currency CFDs 290 408 and 272 276; Stock and ETP CFDs 60 047 and 44 762; Bond CFDs 101 and 735; total CFDs 2 035 006 and 1 837 173; Stocks and ETPs 78 310 and 30 654; gross gain on transactions in financial instruments 2 113 316 and 1 867 827; bonuses and discounts paid to customers (17 328) and (12 629); commission paid to cooperating brokers (51 406) and (54 623); net gain on transactions in financial instruments 2 044 582 and 1 800 575; interest income on client funds 140 129 and interest paid to clients (62 140), giving net interest income of 77 989 and 58 989 — FY2025 · publ. March 2026 · source ↗
Sources
Generated September 24, 2026