Interactive Brokers Group Inc.’s (IBKR - Analyst Report) Electronic Brokerage segment announced a modest improvement in brokerage metrics for December 2012 on a year-over-year basis. The segment clears and settles trades globally for both individual and institutional clients.
Interactive’s total customer Daily Average Revenue Trades (DARTs) improved 6% from December 2011 but declined 10% from November 2012 to 395,000. Yet, total customer accounts climbed 11% from the prior-year month and were in line with the prior month at 209,600.
Interactive recorded Cleared Customer DARTs of 360,000, increasing 5% from December 2011 but falling 13% from November 2012. Further, on an annualized basis, Cleared Average DART per customer account of 431,000 plunged 6% from 459,000 in the comparable month last year and 13% from 496,000 in the previous month.
Additionally, Interactive’s total options contracts plummeted 7% from the prior-year month and 12% from the prior month to 17,395 in the month under review. Futures contracts totaled 6,540, increasing 3% from 6,365 in December 2011 but dipping 20% from 8,206 in November 2012.
Interactive also reported period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended December 2012, customer equity stood at $32.9 billion, augmenting 31% year over year and 2% from the prior month.
Interactive’s Electronic Brokerage segment recorded customer credit balances of $20.5 billion in the month, increasing 23% year over year and remaining at par with the November 2012 level. Also, the company’s customer margin loan balances of $9.8 billion at December 2012-end surged 40% from $7.0 billion at December 2011-end, and 2% from $9.6 billion at November 2012-end.
Although improvement is witnessed in overall brokerage metrics from the last year, 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.
One of Interactive’s peers, Knight Capital Group, Inc. (KCG - Snapshot Report) is expected to announce its December metrics in the first half of this month.
Currently, Interactive retains a Zacks #3 Rank, which translates into a short-term Hold rating.