PRESS RELEASE: Interactive Brokers Reports Rise in Commission Revenue

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As more brokerages are moving towards commission-free trading, Interactive Brokers is reporting a rise in commission revenue. This happened despite the firm pushing for no-fee trading on its platform.

Commission revenue improved by 71%

The commission revenue of Interactive Brokers jumped by 71% to $120 million despite its commission-free offering to the users. The brokerage reported its fourth-quarter earnings today, beating analyst expectations. It reported an increase in daily average revenue trades (DARTs) and also the number of customer accounts.

The largest electronic broker in the US said that its fourth-quarter revenue increased by 20% on a year-on-year basis. It earned $599 million in Q4 2020 as compared to $500 earned in Q4 2019. Its figure was 9% higher compared to the $548 million in the third quarter.

The firm’s income before tax totaled up to $392 million, which is 26% higher than the $312 million earned in Q4 last year. It was also 17% higher compared to $334 million earned in Q3 2020.

Making gains in crucial areas

On an adjusted basis, the leader of low-cost trading in the US was able to make some gains in some crucial areas, despite experiencing a continued revenue fallout because of low rates of interest. Its adjusted profits for Q4 2020 were $375 million which totaled 69 cents per share. This figure is 19% higher compared to $315 million earned in Q4 2019 with earnings per share of 58 cents. This quarter, analysts were expecting a similar EPS result.

The adjusted net revenues of the brokerage increased 16% to $582 million, compared to $503 million reported during the same period last year. Analysts were expecting the firm to hit $560 million. Commission revenue also jumped by 71% during the period to $120 million on a yearly basis. This figure was achieved because of high trading volumes worldwide. This increase was offset by a decrease in net interest income which fell by 22% on a yearly basis.

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