Interactive Brokers reports drop in Q1 net revenues, YoY

Interactive Brokers reports drop in Q1 net revenues, YoY

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US multi-asset brokerage Interactive Brokers (NASDAQ:IBKR) reported a decline in its Q1 2017 net revenues, compared to the same period of the previous year. According to the company data, this quarter the net revenues stood at $374 million and income before income taxes was $213 million this quarter, compared to net revenues of $489 million and income before income taxes of $337 million for the first quarter of 2016.

The electronic brokerage segment of Interactive Brokers posted a 21% decrease of the income before taxes, to $185 million. The net revenues in Q1 2017 decreased 10% to $314 million, on an annual basis.

At the same time, however, the number of customer accounts in the period under review grew 18% to 406 000 and customer equity increased 38% from the year-ago quarter to $96.8 billion. The total Daily average revenue trades (DARTs) for cleared and execution-only customers decreased 12% to 657 000, compared to Q1 2016. Cleared DARTs were 609 000, 11% lower than in the same period last year.

The income before taxes of the market making segment lost $22 million in the quarter that ended on March 31, 2017. According to Interactive Brokers, this was due to lower trading volumes and decreases in volatility and in the actual-to-implied volatility ratio.

For this reason and the slim chances of it returning to a meaningful profitability, in early March the company announced its plans to close its the options market making segment and focus on its profitable activities.

Connecticut-based Interactive Brokers is a broker and a market maker. It, together with its numerous subsidiaries, offers online automated trading of stocks, options, futures, forex, bonds, contracts for difference (CFDs) and funds to traders, investors and institutions in over 100 market across the globe. It has offices in the North America, Europe, Australia, and Asia. The group companies holds licenses by the relevant authorities in the US and the UK.

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