Q2 2024 Interactive Brokers Group Inc Earnings Call Transcript
Key Points
- Interactive Brokers Group Inc (IBKR) reported record net revenues and pretax income for the second quarter of 2024.
- The company saw strong account growth, adding 178,000 new accounts, which contributed to a record $107.1 billion in client credit balances.
- Client equity increased by 36% over the previous year, reaching $497 billion, just shy of half a trillion in total client assets.
- Commission revenue was the second highest ever, driven by higher trading volumes from a growing base of active customers.
- Net interest income reached a quarterly record of $792 million, supported by increased margin borrowing and higher yields on margin loans.
- The company faces uncertainty due to geopolitical tensions and upcoming elections, which could impact market conditions and trading volumes.
- Securities lending net interest has not been as strong as in prior quarters due to reduced demand for shorting stocks and fewer hard-to-borrow names.
- The company anticipates a potential $59 million reduction in annual net interest income for every 25 basis point decrease in the Fed Funds rate.
- Higher execution, clearing, and distribution costs, up 24% over the previous year, impacted profitability despite being passed through to customers.
- The company experienced a significant loss due to a mishap on the New York Stock Exchange, with no prospects for recovery.
Hello and thank you for standing by. Welcome to Interactive Brokers Group second-quarter 2024 earnings call. (Operator Instructions) I would now like to turn the call over to Nancy Stuebe. You may begin.
Thank you. Good afternoon and thank you for joining us for our second-quarter 2024 earnings call. Joining us today are Thomas Peterffy, our Founder and Chairman; Milan Galik, our President and CEO; and Paul Brody, our CFO. I will be presenting Milan's comments on the business, and all three will be available on the Q&A.
As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events, which by their nature are not certain and our outside of the company's control. Our actual results and financial condition may differ possibly materially from what is indicated in these forward-looking statements. We ask that you refer to the disclaimers in our press release. You should also review a description of risk
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