TD Ameritrade earnings up on volatility but stock loan revenue dips
A spike in client activity boosted earnings for US broker TD Ameritrade, although revenue from its stock lending activities declined in the three months to March.
The Nebraska-based firm, which has a well-established retail client base and growing institutional arm, said volatility helped the firm record a strong quarter for trading, which was at record levels.
Overall the group’s net income climbed 8% to $205m in line with analysts' estimates, while net client assets at the online brokerage increased by $14bn for a growth rate of 8%, another record.
Total client assets stood at $711bn.
The broker, which loans out stocks owned by high-net-worth retail investors and some institutions, said net stock lending revenue declined $9m to $32m for the quarter.
“As we have noted several times, predicting stock lending is very difficult, but a higher volatility and fewer IPOs are two factors,” said Stephen Boyle, chief financial officer.
“Stock lending tends to move up and down with – inversely, with volatility. And so, we did see a big dip early in the quarter. And we've seen that start to come back.”
Found this useful?
Take a complimentary trial of the FOW Marketing Intelligence Platform – the comprehensive source of news and analysis across the buy- and sell- side.
Gain access to:
- A single source of in-depth news, insight and analysis across Asset Management, Securities Finance, Custody, Fund Services and Derivatives
- Our interactive database, optimized to enable you to summarise data and build graphs outlining market activity
- Exclusive whitepapers, supplements and industry analysis curated and published by Futures & Options World
- Breaking news, daily and weekly alerts on the markets most relevant to you