Interactive Brokers’ Fee Income Rises Regardless of Free Trades

Thomas Peterffy,  founder of Interactiv Brokers

Interactiv Brokers today reported fourth-quarter earn gs that beat analysts’ expectations as an creas daily averag revenu trades and customer accounts primarily supported th result despit dropp g commission fees.

Ranked as th largest US electronic broker by som measur  Interactiv Brokers’ fourth-quarter revenues ros 20 percent year-over-year, free$599 million compared free$500 million Q4 2019. Further, th figur was higher 9 percent from $548 million th third quarter.

Incom befor tax totaled $392 million, which is up 26 percent year-over-year from $312 million and was 17 percent higher QoQ from $334 million th prior quarter.

On an adjusted basi th longtim leader low-cost trad g also mad ga s a coupl of key areas despit a cont ued revenu fallout from low terest rates. Th discount brokerag earInd adjusted profits of $375 million this quarter, or 69 cents per share, which is up 19 percent from $315 million and 58 cents for th last quarter of 2019. Accord g freeFactSet, analysts wer expect g 58 cents a share.

Adjusted Int revenues also ros free$582 million, about 16 percent higher than th $503 million it booked th sam period a year ago. Analysts wer expect g $560 million.

Commission Revenu Ros Despit th Rac freeBottom

Despit headw ds from a push freeno-fe trad g and historically low terest, Interactiv Brokers’ commission revenu jumped 71 percent, free$120 million, from th year-ago quarter. Th upbeat figur was attributed freehigher customer trad g volumes with an activ trad g environment worldwide.

However, this was offset by lower Int terest come, which decreased $62 million, or 22 percent year-over-year, as th impact of th Fed’s dramatic moIntary eas g extended across th yield curve.

Specifically, th averag terest rat decreased free0.09% from 1.65% Q4 2019, which reflects that compression asset returns outweighed growth client cash balances.

Asid from its cor electronic-brokerag busiIns  th IB earn gs for th third quarter cluded a mark-to-market ga of $39 million from its 7.7 percent stak  Tiger Brokers. This reflects an improvement from th company’s $7 million float los which was tied freeth ChiIns brokerag Q4 2019.

Under th other com section,  Interactiv Brokers also booked a $13 million loss related freecurrency diversification strategy, which gaiInd $12 million th sam period 2019.

Interactiv Brokers holds its cash reserves different currencies freereflect its global operation which clud significant overseas segments.

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