Interactive Brokers marks rise in pre-tax income in Q4 2019

Maria Nikolova

The results for the final quarter of 2019 were positively impacted by strong growth in net interest income, partially counterbalanced by lower commissions revenue.

Online trading major Interactive Brokers Group, Inc. (NASDAQ:IBKR) has just posted its financial results for the fourth quarter of 2019.

Net revenues for the final quarter of 2019 amounted to $500 million, up from $492 million a year earlier. Income before income taxes was $312 million in the final quarter f 2019, compared to income before income taxes of $309 million for the same period in 2018.

The results for the quarter were positively impacted by strong growth in net interest income, which increased $44 million, or 18%, from the year-ago quarter. This was partially counterbalanced by lower commissions revenue, which decreased $37 million, or 18%, from the year-ago quarter.

Across segments, let’s note that the electronic brokerage segment saw income before income taxes increase 1% to $314 million in the quarter to end-December 2019, compared to the same period last year. Net revenues decreased 1% to $486 million due to lower commissions revenue and other income, partially offset by higher net interest income.

Commissions revenue marked a drop of 18% from the year-ago quarter reflecting lower customer trading volume in options, futures and stocks. Net interest income increased 19% as average customer credit balances and securities lending balances increased from the year-ago quarter. Pretax profit margin was 65% for the final quarter of 2019, up from 63% in the same period a year earlier.

Customer accounts grew 15% to 690,000 and customer equity increased 36% from the year-ago quarter to $174.1 billion. Total DARTs for cleared and execution-only customers decreased 16% to 797,000 from the year-ago quarter. Cleared DARTs decreased 16% to 719,000 from the same period last year.

Regarding market making, this segment saw income before income taxes decrease 44% to $5 million in the quarter to end-December 2019, compared to the same period a year earlier, primarily due to lower net revenues from the remaining operations.

For the quarter ended December 31, 2019, Interactive Brokers recognized a mark-to-market loss of approximately $7 million on its strategic investment in Up Fintech Holding Limited (“Tiger Brokers”). For the twelve months ended December 31, 2019 the Group recognized a net mark-to-market gain of $9 million on this investment.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on March 13, 2020 to shareholders of record as of February 28, 2020.

Read this next

Digital Assets

Binance executives sue Nigerian authorities over rights violation

Two senior executives from Binance have filed a lawsuit against against Nigeria’s national security adviser’s office and its anti-corruption agency, alleging violations of their fundamental rights.

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

<