Six months ago, Avanza, Sweden’s second largest online stockbroker, announced that it was to embark on a major pan-European expansion, which would see it establishing a presence in every major European country by the end of 2001. Now, however, this looks unlikely as Avanza declared this week that it was freezing its plans for European growth.
Avanza had planned for its German operations to get underway first, followed by the launch of services in Italy, the Netherlands and the UK, which were all scheduled for this year. This week, however, Avanza said that it was suspending operations in Germany, due to go live this month. Operations in the Netherlands and UK are also being terminated prior to their launch in the spring.
Per Nordlander, chief executive of Avanza, said of the company's setback, which is a result of a general downturn in the fortunes of online share trading: 'The online branch in Europe is standing completely still. From the first-quarter record growth in new active customers of 70 per cent, growth fell to 9 per cent in the third quarter, and under the fourth quarter we believe growth was nil'.
He continued: 'In order to start up you need a flow of new customers, which today there isn't. It would be incredibly expensive to reach a profitable volume, however good the service we launch'.
Avanza is going to keep its options open and still could press ahead with expansion in Germany if the online trading sector picks up again, or there is also the possibility of going into partnership with a strong, existing online broker. Avanza remains in a healthy position in its native country, Sweden, where it holds around 10 to 15 per cent of the online share trading trading market, although it has seen trading volumes per customer fall from 60 trades per day in March 2000 to approximately 25 in the last part of the year.
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