Interactive Brokers Group, Inc. (NASDAQ: IBKR) stock fell over 2.5% on October 16th, 2019 (As of 9:30 am GMT-4; Source: Google finance). With the continued tailwind from new account growth, the company’s quarterly total DARTs rose 13% to 859,000 over last year. In this quarter the overall average cleared commission per DART fell 2% versus last year to $3.69 on a product mix that featured smaller average trade sizes in most product segments. The consolidated equity capital at September 30, 2019 was $7.7 billion, $6.5 billion was held in brokerage, $0.9 billion in market making and customer facilitation activities, and the remainder in corporate.
For the third quarter of FY 19, the firm recorded 19% growth in net interest income to a record $291 million and a 12% increase in commissions revenue to $187 million from a year ago. Commission revenue rose on significantly higher volumes in futures and options somewhat offset by lower volume in stocks with smaller trade sizes in most product categories. Further, IBKR’s total accounts grew 16% to 666,000, which contributed to customer equity growth of 10% to $156.6 billion at third quarter end. IBKR in the third quarter of FY 19 has reported the adjusted earnings per share of 45 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 45 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 6 percent to $466 million in the third quarter of FY 19, beating the analysts’ estimates for revenue of $461 million.
Moreover, the company’s net interest margin widened to 1.77% from 1.68% in the third quarter of 2018. The Federal Reserve had reduced rates by 25 basis points twice this past quarter in July and September, after raising them four times over the course of 2018. As these rates were not in effect for the entire period, the investors should see the full effect of them over the coming quarters. Electronic Brokerage segment net revenues rose 14% to $506 million for the quarter over last year. Execution and clearing expenses were up 19% to$64 million. Fixed expenses and brokerage were $113 million, up 14%, on the back of increased legal and compliance expenses.
Meanwhile, the company has recently announced that it will be rolling a “lite” version of its trading platform with free trading for U.S. equities, a move followed by similar announcements from companies such as Fidelity Investments, Charles Schwab Corp. and TD Ameritrade Holding Corp.