Interactive Brokers Group Inc.’s (IBKR) Electronic Brokerage segment announced an increase in brokerage metrics for the month of September 2012. The segment clears and settles trades globally for both individual and institutional clients.
Interactive’s total customer Daily Average Revenue Trades (DARTs) declined 19.6% from September 2011 but increased 15.2% from August 2012 to 410,000. However, total customer accounts improved 11.6% from the prior-year month and 0.8% from the prior month to 205,300.
Interactive recorded Cleared Customer DARTs of 390,000, declining 17.7% from September 2011 but improving 15.0% from August 2012. Further, on an annualized basis, the company reported Cleared Average DART per customer account of 479,000, plunging 26.8% from 654,000 in the comparable month last year but jumped 14.0% from 420,000 in the previous month.
Moreover, Interactive’s total options contracts plummeted 25.8% from the prior-year month but inched up 0.5% from the prior month to 19,645 in the month under review. Futures contracts totaled 6,807, decreasing 23.3% from 8,878 in September 2011 and 5.8% from 7,223 in August 2012.
Interactive also reported period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended September 2012, customer equity stood at $31.5 billion, augmenting 35.2% year over year and 3.6% sequentially.
Additionally, Interactive’s Electronic Brokerage segment recorded customer credit balances of $20.4 billion in the month, increasing 23.6% year over year and 5.2% sequentially. However, the company’s customer margin loan balances of $9.2 billion at September 2012-end jumped 35.3% from $6.8 billion at September 2011-end, and 4.5% from $8.8 billion at August 2012-end.
Although improvement is witnessed in overall brokerage metrics from the last month, it is anticipated that lower trading activities and fluctuating interest rates will continue to impact the company’s financials in the near term. In addition, Interactive’s dependence on IBG LLC and its wide international exposure make us apprehensive. However, we are impressed with Interactive’s better-than-peer positioning, technological excellence, stable balance sheet and robust capital base.
One of Interactive’s peers – Knight Capital Group, Inc. (KCG) – is expected to announce its September metrics in the first half of this month.
Currently, Interactive retains a Zacks #4 Rank, which translates into a short-term Sell rating.
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