TD Ameritrade earnings up on volatility but stock loan revenue dips

TD Ameritrade earnings up on volatility but stock loan revenue dips

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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.”

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