Behind TD Ameritrade’s Asset-Based Revenues


Oct. 31 2017, Updated 3:45 p.m. ET

Bank deposit account fees

Asset-based revenues for TD Ameritrade Holding (AMTD) consist of three components: investment product fees, net interest revenues, and bank deposit account fees. The company reported bank deposit account fees of $1.1 billion in fiscal 2017 compared to $926 million in fiscal 2016.

It reported strong net interest revenue of $690 million in fiscal 2017 compared to $595 million in fiscal 2016, implying a YoY (year-over-year) rise of 16%. The rise was mainly due to favorable growth and the rise in rates.

Its return on equity was 16.2% on a TTM (trailing 12-month) basis. Its peers (XLF) Charles Schwab (SCHW), Interactive Brokers Group (IBKR), and LPL Financial Holdings (LPLA) had returns on equity of 13.6%, 10.7%, and 25.5%, respectively, on a TTM basis.

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Investment product fees

TD Ameritrade reported investment product fee-related revenues of $423 million in fiscal 2017 compared to $374 million in fiscal 2016, which implies a YoY rise of 13%. The company’s top management is considering a good momentum for fiscal 2018 in relation to new products offered in fiscal 2017.

The company reported net interest revenue of $210 million in fiscal 4Q17 compared to $151 million in fiscal 4Q16.

For fiscal 2018, in order to achieve revenue growth, management expects balanced organic and market-driven growth.


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