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Interactive Brokers Posted Strong Second-Quarter Results

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Net revenues

Interactive Brokers Group (IBKR) posted net revenues of $445 million in the second quarter, a rise of 14.9% on a YoY basis. The company’s net interest income in the second quarter was $225 million, which was a 45% increase YoY.

Interactive Brokers generated commissions amounting to $185 million in the second quarter. Global disturbances have brought uncertainty to equities, which has increased customers’ trading volumes.

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The pre-tax income of the company’s Electronic Brokerage segment was $283 million in the second quarter, implying a YoY rise of 43%. The segment’s net revenues were $443 million during the same period, which reflects growth of 33% on a YoY basis thanks to commissions, net interest income, and other income. Interactive Brokers Group’s Market Making segment garnered net revenues of $22 million in the second quarter, while the company’s Corporate segment posted -$20 million in the second quarter.

Electronic Brokerage segment’s metrics

In the second quarter, the Electronic Brokerage segment saw YoY growth of 47% in net interest income because of the higher average margin loans, customer credit balances, and interest rates. Of the total net interest income, this segment generated $217 million in the second quarter. During the same period, the segment’s commissions saw growth of 16% on a YoY basis aided by strong futures and options’ trading volumes.

Charles Schwab (SCHW), Interactive Brokers Group’s competitor (VFH), posted $2.5 billion in net revenues in the second quarter, which reflects an increase of 17% YoY. E*TRADE Financial (ETFC) and TD Ameritrade Holding (AMTD) posted total net revenues amounting to $708 million and $1.4 billion, respectively, in the March quarter.

In the second quarter, Interactive Brokers Group’s Market Making segment posted pre-tax income of $9 million, while in Q2 2017, it posted pre-tax loss amounting to $24 million. The primary reason for the loss was the closure of its options market making business.

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