Interactive Brokers Ends Q4 2022 with Record Profits

Wednesday, 18/01/2023 | 06:28 GMT by Arnab Shome

The reported revenue of the broker also jumped by 62 percent.

An increase in interest rates has helped the broker generate record numbers.

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Interactive Brokers Group (Nasdaq: IBKR) ended the quarter between October and December with earnings of $1.31 per share, making it the company’s best three months in terms of quarterly profits. The adjusted figure at $1.30 per share is much higher than the market expectation of $1.16 per share.

Interactive Brokers Sees a Record Quarter

The American online broker reported that net revenues were $976 million for the last quarter of 2022, while the adjusted figure came in at $958 million. The two numbers jumped roughly 62 percent and 40 percent, respectively, from the same period of the previous year.

The announcement on Wednesday detailed that the brokerage firm’s revenue from commissions increased by 3 percent to $331 million, while the net interest income jumped by 92 percent to $565 million on higher benchmark interest rates and customer credit balances.

Its “other income”, which also increased $107 million, came at a gain of $37 million due to the company’s investment into UP Fintech, currency diversification strategy, and tax remeasurements.

The reported pre-tax income of the broker increased by almost 85 percent to $689 million, while the adjusted number took an upward leap of 48 percent to $671 million. The company closed the quarter with a net income of $633 million, compared to $338 million in the last quarter of 2021.

In the third quarter of the year, the broker reported net revenue of $790 million and a pre-tax income of $523 million. Moreover, a spike in interest incomes boosted the performance of that quarter.

Check out the latest FMLS22 session on "Online Trading – A Futurist Look."

Customer Metrics at Interactive Brokers

Interactive Brokers is one of the more popular online trading platforms around the globe. The number of customer accounts on the platform increased by 25 percent to 2.09 million at the end of Q4 2022.

However, customer equity decreased by 18 percent to $306.7 billion, and the total DARTs took a 22 percent dive to 1.89 million. The cleared DARTs for the quarter came in at 1.69 million, which is again 22 percent lower. The customer margin loans decreased by 29 percent to $38.9 billion, whereas customer credits increased by 9 percent to $95.2 billion.

Interactive Brokers Sees a Record Quarter

Its “other income”, which also increased $107 million, came at a gain of $37 million due to the company’s investment into UP Fintech, currency diversification strategy, and tax remeasurements.

In the third quarter of the year, the broker reported net revenue of $790 million and a pre-tax income of $523 million. Moreover, a spike in interest incomes boosted the performance of that quarter.

Check out the latest FMLS22 session on "Online Trading – A Futurist Look."