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How Interactive Brokers’ Market-Making Division Performed in 4Q17

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Updated

YoY decline

The Market-Making division of Interactive Brokers Group (IBKR) saw a decline in pre-tax income in 4Q17 compared to 4Q16. The division generated net revenues of $25 million in 4Q17 compared to $45 million in 4Q16. On the positive side, the division saw a decline in non-interest expenses from $33 million in 4Q16 to $17 million in 4Q17.

The Market-Marking division’s pre-tax income was negatively impacted by the fall in trading gains in 4Q17 to $8 million. The transfer of the US Market-Making business was successfully wrapped up in 3Q17, which helped the division in terms of incurring less operating costs in 4Q17. The transfer was made to Two Sigma Securities.

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Performance in 2017

The Market-Making division saw a substantial decline in net revenues from $190 million in 2016 to $86 million in 2017. The division also saw a decline in non-interest expenses from $146 million in 2016 to $113 million in 2017.

The division also reported pre-tax income of $44 million in 2016 and a pre-tax loss of $27 million in 2017.

Over the last 12 months, Interactive Brokers Group’s dividend yield was 0.64%. Its peers (XLF) Bank of America (BAC), Morgan Stanley (MS), and Wells Fargo (WFC) have dividend yields of 1.1%, 1.6%, and 2.5%, respectively.

In the next part, we’ll take a look at Interactive Brokers Group’s balance sheet.

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