IG shares drop after CEO retires, profits hit by Swiss franc

(Recasts with stock price fall, comment from CEO, analysts, background on franc conflict)

By Aashika Jain and Patrick Graham

LONDON, July 21 (Reuters) - Shares (Frankfurt: DI6.F - news) in IG Group Holdings racked up their biggest daily fall in more than four years on Tuesday after the financial trading platform reported a hit to earnings from January's surge in the Swiss franc.

The company also said Chief Executive Tim Howkins, 52, would retire in October.

Howkins said in a media call that IG (LSE: IGG.L - news) categorically denied allegations by a group of clients, reported by Reuters in June, that the company breached British trading rules by trading in its own interest several minutes before acting on the clients' behalf during a surge in the franc on Jan. 15.

IG has been seeking to recoup money from the clients, who say its system failed to serve them fairly and effectively in franc trades after the Swiss central bank abandoned its cap on the currency.

Howkins confirmed some clients had complained to Britain's Financial Ombudsman, a first legal step that can yield awards of up to 150,000 pounds ($233,000) for successful complaints.

"We are fully cooperating with the financial ombudsman," Howkins said, adding IG did not want to get into a "mud-slinging exercise".

"We are talking about five clients, out of a total of over 370, the vast majority of those 370 clients have settled their debts with us. So we really are talking about a handful of people here stirring up (this story)."

The company, which had earlier flagged 30 million pounds in expected losses from the franc trades, reported a 13 percent fall in reported pretax profit to 169.5 million pounds for the year ended May 31. (http://bit.ly/1MEIDvs)

It said in the results statement that it was still to settle with "less than 100" of the 342 clients whose trading accounts were in the red after the franc trades.

Shares in IG fell by more than 6 percent after the results, which analysts said were broadly in line with expectations.

"We believe the growth outlook for the business is challenging and as such, the current valuation looks too rich," said Liberum analyst Justin Bates.

"IG has built an enviable market position in spread betting and CFD trading. However, we consider it to be a mature business that is struggling to grow in a meaningful fashion."

($1 = 0.6435 pounds) (Editing by Gopakumar Warrier and Mark Potter)