Q4 2020 Interactive Brokers Group Inc Earnings Call
Please be advised the today's conference may be recorded if you require any further assistance. Please press Star then zero I would now like the hand accomplished over the two year holds today Nancy Stuebe director of Investor Relations. Please go ahead.
Thank you.
Good afternoon, and thank you for joining us for our year end 'twenty and 'twenty earnings Conference call.
Once again Thomas is on the call and will handle the Q&A, but asked me to present the rest of his comments.
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 are outside of the company's control on.
The annual 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 the description of risk factors contained in our financial reports filed with the SEC.
'twenty and 'twenty was the year of unprecedented worldwide investor engagement with the markets and interactive brokers and capturing a large piece of it.
We ended the year with a record 1.073 million accounts of 56% over last year.
And 'twenty and 'twenty, we opened over 383000 net new accounts three times that of our previous record.
Client equity grew 66 per cent to $289 billion.
Trading activity and continued strong all year with active customer trading levels.
Total darts began to increase last January and doubled over the course of the year to $2 1 million per day.
Per account Darts rose from 266 last year to 459 this year.
Growth came from a broad range of geographic geographies and customer types for our geographically diverse sales team and from strong word of mouth.
And many countries, we've now grown to a large enough size in terms of accounts and word of mouth leads to meaningful growth from the clients, who use and recommend us to their friends and colleagues.
As more people want to participate and the markets invest globally and diversify their holdings. They look to their more experienced friends, who are found at interactive brokers and the access and variety of securities. They are looking for there.
And then see what we offer and sign up.
And many regions the global access can often be found nowhere else or if it can be found it comes only at and unreasonably high price.
While accounts and the United States have doubled since 2015 outside the U S. They are up more than four times, meaning we are less dependent on the U S or on any one country for our future.
The U S. Now accounts for 26 per cent of our total accounts down from nearly half of five years ago.
Challenges met the fear include the impact of the Covid pandemic on our clients and staff the impact of the cash settled contract closing out of negative price the effect of Brexit on our European business and the conclusion of our ongoing conversations with regulators.
Regarding COVID-19 well it has led to a resurgence of interest and the markets as people at home book for something constructive to do it has also meant that the majority of our staff works from home and.
And the technology company, we are uniquely well positioned to handle this and have not seen interruptions or issues and our business because of it.
I'm happy to say that thanks to the tremendous effort on the part of regulators and our team in Europe.
Received our approvals before the Brexit deadline and have been able to migrate accounts to our new operations in Luxembourg, and Hungary and Ireland.
Looking forward to working in these countries and expanding our European business further.
And W. T I, we have spoken about it on previous calls.
We are completing programming for negative prices and all product categories and case this or similar first ever event occurs again.
We have spent a great deal of time and effort coordinating with multiple regulators, including the C. F. T C SEC and FINRA and working with consultants to make sure our solutions and protocols are satisfactory.
We have hired the necessary people and put most of these changes into place as we work on the last remaining items.
The cost associated with this which was spread over several quarters should now start to ease while the cost of compliance with regulatory regimes, and Hong Kong, Australia, Canada, and the EU are now picking up.
Our commissions were up 71% and the fourth quarter and up 58 per cent for the year to $1 1 billion.
Despite zero interest rates around the globe and the introduction of zero commissions and late 2019, our total net revenues for the fourth quarter were up 20% and for the year of 15% of two to $2 2 billion.
Our pretax margins were also strong at 65 per cent for the fourth quarter and 57 per cent for the year.
Excluding non core items pre tax margins were 65 per cent for the fourth quarter and 61% and for the year.
There is no other broker we know of who comes close to the levels of profitability and.
And we achieved these margins while offering state of the art technology and global access.
Now I will go over our five client segments.
Individual customers, we're the clear stars and 'twenty and 'twenty.
Posting the strongest account growth of all our clients segments of 77 per cent with 71% growth and client equity and 69% growth and annual commissions.
Individuals' now make up 57 per cent of our accounts, 36% of our client equity and 54 per cent of our annual commissions.
All of geographic regions in the segment experienced significant growth, particularly in Europe and Asia.
We continue to see investor demand for global access and wide product choice with the global pandemic and more time at home and thing as tailwind Inc.
<unk> investors large and small but this is an opportune moment to enter the markets.
While we call the segment individuals' and incorporates a wide range of clients from new smaller investors buying their first stocks to larger more sophisticated ones trading equities and derivatives multiple times, a day and several countries.
Our platform can serve all of them and help them to achieve better returns by minimizing the costs.
Introducing brokers was our next fastest growing segment.
The count growth of 42% client equity growth of 115% and 12 month Commission growth of 121 per cent.
Introducing brokers are now of 29% of our accounts 30 per cent of our client equity and 13% of our commissions.
As with individuals introducing brokers were strong in all geographic areas, particularly in Europe, and especially in Asia. The similar tailwind to individuals the desire by investors to open accounts, especially internationally and to participate on the market.
These accounts are basically also individual accounts with the broker between I B K R and the individual account holder and.
Exchange for a smaller commission, we can pass onto the broker the direct communication with the customer and of course, it is the broker who recruits the customer.
Small mid sized and startup of brokers continue to find it difficult to build and maintain and complex technology involved and offering the global access and product offerings of our customers want so they come to us to white brand our state of the art technology and capitalize on our LOE costs.
As competitive pressures increase and as agencies in various countries increase their compliance oversight of the financial services industry complexity rises over time.
The encouraging more brokers to come to force to start up with us.
Hedge funds constitute one per cent of our accounts seven per cent of our client equity and seven per cent for annual commissions.
And 'twenty and 'twenty, we saw growth from hedge funds of two per cent and accounts 34 per cent and client equity and 21% and 12 month commissions.
We achieved this growth despite the hedge fund industry overall experiencing a third consecutive year of fund outflows.
Hedge funds remain a large multitrillion dollar global market and we continue to have room to grow in this area.
Proprietary trading firms are two per cent of our accounts nine per cent of client equity and 14% of yearly commissions.
For the year. This group grew 28 per cent and accounts.
<unk> 44 per cent and client equity and 43% and commissions.
Despite already being well penetrated in the segment are continued growth here means that our platform demonstrates value and appeal for sophisticated traders and their larger accounts.
Finally, we of financial advisors. They are 12 per cent of our accounts, 17% of our customer equity and 12% of annual commissions accounts.
Accounts and this group grew by 17% high and equity by 28 per cent and commissions by 18%.
Several factors will continue to drive this business.
Our Greenwich compliance group, which provides registration and compliance assistance for new and existing <unk> continues to sign up or you just want to open their own businesses or more removed from an existing clearing firm.
Going independent means <unk> can keep all of the fees they earn as.
And as more advisors look to become independent our low commission and financing rates wide variety of mutual fund families offered and the availability of Greenwich compliance of the services contribute to growth and the segment.
Second with the consolidation among our competitors many advisors do not want to compete for clients with their clearing firm or be subject to the hidden fees that always seem to pop up.
We welcome all of them with transparent pricing no competing products or in house advisers free portfolio performance reporting of free CRM and global market access.
Although we do not yet feel it and growing numbers of advisors. Our sales force is getting a large number of inquiries from advisors looking for a new platform and for advisors, hoping to become independent and the near future.
There was a great deal that we're looking forward to in 'twenty and 'twenty one.
We have recently rolled out and we will continue to broaden our impact of dashboard and.
Dash Board allows our clients to select the ESG criteria on most important to them. So they can identify and invest in those companies that share of their values.
It also analyzes clients' portfolios and calculates and overall score to see how well their portfolios aligned with the values most important for them.
We are also excited about our mutual fund marketplace, which offers 37000 and funds all with no custody fee to our clients around the world.
Because we do not off of our own funds, we do not compete against our clients.
To close when we started of brokerage business and 19 ninety-three, we thought of good goal to have one that would motivate us but seem like a distant target far and the future would be to achieve 100000 accounts on our platform.
We reached that in 2815 years later.
We thought again about what and achievable, but distant goal would be and came up with 1 million accounts.
I'm happy to say, we achieved that goal and October 12 years later.
Our goal now is 80 million accounts for 1% of World population.
How long will that take.
We are not sure but think of 10 to 15 years.
It is encouraging that there was one country today, which I'm not going to name where we have accounts from over one per cent of its population.
This is of high target similar to our earlier goals. It is a ways away, but can be achieved.
If we continue to automate and attract customers by giving them the tools low pricing and global product access the need to succeed.
With that I will turn the call over to our CFO, Paul Brody, who will go through the numbers for the quarter Paul.
Thank you Nancy thanks, everybody for joining the call.
As usual I'll review, our fourth quarter and on the.
Our full year results. The main factors that drove those numbers and then we'll open it up for questions.
Yes.
On the whole for the year depend denike and actions by the Federal reserve, which stirred up the markets and reduce the U S interest rates near zero and.
Produces substantial shift and the components of our revenue.
Strong gains and commissions bolstered by a flood of new customer accounts more than made up for the drop in net interest income.
Comparing the fourth quarter to the prior.
The.
The net revenues of commissions and net interest income changed from 34% and 57% to 48 per cent and 38 per cent.
The combination together with the other revenue streams produced the 20% year over year increase and quarterly net revenues and record annual pre tax income.
Turning to operating data.
Trading volumes and customer account openings.
At the high levels, we've seen throughout the year, leading to strong growth in accounts and client equity line of credit balances margin lending and securities with.
Total of group accounts.
And about one point of $1 million of 56% year over year contributing to the client equity.
The growth of 66 per cent.
We saw growth and all customer segments, and in particular and individuals' and introducing brokers.
Market volatility, though higher than last year was the lowest this quarter for 'twenty and 'twenty.
As measured by the average VIX vol.
Volatility rose to $25 seven and the fourth quarter of <unk> 83 per cent year over year, but down from its second quarter, 'twenty and 'twenty peak of nearly 35.
However, the band between this quarters low and high VIX of 20 and 40.
Wider than in the third quarter and wider than any quarter last year.
And this contributed to strong trading volumes and of 71% increase and commission.
Despite continued low or negative interest rates worldwide.
Our net interest income.
And only 22% versus the fourth quarter of 19.
Students strength and customer cash balances margin lending and securities line.
56, 6% of count growth provided a tailwind to the strong volumes and all product categories.
Customer contract and share of volumes and options futures and stocks.
The 76%, 22% and 215% respectively.
For the fourth quarter.
And the 67%, 30% and and.
97%, respectively for the year.
Our volumes outpaced overall industry volumes and the U S, which were up and nearly all categories.
And the FX dollar volume.
Volumes rose as well.
Darts reached a record.
$2 1 million more than two and a half times the 797000 of the fourth quarter of last year.
Our average cleared commission per Dart and was down.
On the 32% to $2 46.
And for several reasons.
First.
More trading and equities relative to the derivatives derivatives and a more expensive there.
And not necessarily more profitable due to relatively high exchange.
Second higher volumes of.
And I'd be care of orders that added liquidity to exchanges.
Generating more rebates from the exchanges.
These are passed on in the form of reduced commissions to customers choosing tiered Commission.
And third smaller average trade sizes.
Results for the full year reflected the continued momentum and operational leverage.
Core brokerage business.
Full year commissions rose 58% on high.
Volatility and volumes.
Net interest income fell 19% with the impact of near zero interest rates, partially offset by higher customer cash and margin loan balances as well as strong securities lending.
Volumes were seen in all product categories, surpassing the general overall industry volume trends.
For the full year total darts rose 115%.
And the average commission per Dart fell 24 per cent for the reason I pointed to earlier.
The net interest margin table shows that our net interest margin tightened in the fourth quarter to one 4%.
And from 1.7 hundred per cent and a year ago period.
For the year net interest margin was one point out of 7% down for them.
And one 7% last year.
Despite the drop in the U S benchmark rates to near zero higher margin loan balances of strong securities lending performance and some positive contribution to customer credit balance interest.
For those currencies with negative rates.
Kept the NIM from falling further.
The federal reserve lowered rates to a target range.
And the first quarter and has kept and their staff.
Internationally.
Zero or negative and nearly every country and which we do business.
During the year, we kept a relatively short duration on our U S treasury portfolio in.
And the low rate environment, we reported a mark to market losses of $4 $5 million per year.
Including a nominal loss and the fourth quarter.
We plan to hold the securities to maturity. So these gains and losses are temporary.
And as brokers unlike banks.
Require us to Mark the securities to market and our financial reporting. This is one of our non-GAAP items that we consider to be non core.
Outside the U S interest rates were predominantly zero to negative.
We recorded positive interest on certain customer cash balances, where we pass through negative rate costs on these current.
For rate increases that may occur in the future note that about 25 per cent of our customer credit balances are not in the U S. Dollars. So changes in the U S rates will not impact of all of the film.
Despite higher customer cash balances.
Cash interest income fell due to the collapse and rates and a persistently flat yield curve.
Average margin loan balances for.
Rose 19%.
And finished the year of 26% over the year ago quarter as.
As investors displayed and increased appetite for risk.
The reflects our ability to fulfill the needs of larger customers as opportunities arise.
So despite our narrow spread over benchmark rates on margin loans, we continue.
The experience some spread compression and this low rate environment.
We consider our low margin rates, the significant factor and attracting investors to the interactive brokers.
Securities lending interest income was up 44% this quarter and 33 per cent for the full year.
Automation allows us to optimize the availability of customer positions to lend hard to borrow high rate securities and the customer short stock value.
6% from the prior year and is largely covered by the customer margin stocks and reducing our need to borrow from external counterpart.
Now for our estimates of the impact of the next 25 basis point increase in rates.
And when calculating the impact of rate changes, we understand that as the possibility of the future read at rate of increase becomes more certain and this expectation is typically already reflected and the yields of the instruments and which means.
Yes.
Therefore, we attempt to isolate the impact of and unexpected.
Separate from the impact of rate hikes.
Already been baked into the prices of these.
And instruments.
With that assumption, we would expect the next 25 basis point on anticipated rising rates.
To produce and additional $98 million and net interest income over the next four quarters and the $103 million as the yearly run.
Based on our current balance sheet.
These numbers are highly sensitive to benchmark rate changes due to the impact of low rates on the spread between what we earn on our segregated cash and what we pay.
Our customers when U S rates fell below 50 basis points, our spread compressed.
And the last one investing our segregated cash.
However, the converse is also true.
That as rates move back up towards the 50 basis point spread expand significantly.
The yearly run rate includes the reinvestment of all of our present holdings at the new assumed rate, but does not take into account of any change and how we manage our cash.
If we're successful and continuing to grow our customer assets higher cash.
Cash and margin lending balances will offset some of the loss of net interest income from low benchmark rates.
Turning to our income statement.
As a reminder, one year ago.
The began reporting our consolidated numbers only and we no longer report segment.
We define non core items as those not part of our fundamental operating results.
Non core items included for items this quarter first our.
For our currency diversification strategy produced the loss of $13 million versus the $12 million gain last year.
Second and.
Nominal mark to market loss on U S government securities of $300000 versus $1 million.
Yes.
Third the gain on our investments of $33 million versus the loss of $15 million last year.
And for tax and related adjustments netting to a $10 million addition to net income at the public company level.
The net effect of these adjustments net income by $11 million this quarter versus decreasing it by $600000 last year.
Net revenues were reported $599 million for the quarter of 20% versus last year's fourth quarter, excluding non core items net revenues were $582 million up 16% versus last year.
Yeah.
Commission revenue rose, 71% for $288 million on significantly higher trade volumes and all product categories.
Net interest income fell 22% for $225 million.
It was up sequentially.
The decline was prep for not.
Predominantly due to the drop in global interest rates to near zero and below.
Other fees and services revenues Rose 44 per cent for $52 million. These include market data exposure and account activity fees as well as fees generated from facilitating customer participation and IPF.
Other income of more variable category that includes the gains and losses on our investments and currency strategy as well as principal transactions was $34 million versus $9 million and the fourth quarter last year.
Ex non core items other income increased to $17 million from $12 million a year ago.
Non interest expenses for $207 million for the quarter.
Of 10% from last year, due primarily to higher execution and clearing costs on stronger trade volumes and higher employee compensation and benefits costs.
Execution and clearing expense.
Trade volume for several of them.
Including the mix of products traded as well as the higher amounts of rebates paid by exchanges when.
And.
There and liquidity.
Note that these rebates, partially offset commission revenues, which reduces the average commission per dart.
Employee compensation and benefits costs rose, 15% and.
Occupancy and communications expenses, both through $1 million as we expanded our presence in Europe.
At quarter, and our total head count stood at 2033 of <unk>.
The 4% increase over last year as we expanded the service significantly more customers staff, our new European offices, and further strengthen our compliance function.
Due to the COVID-19 pandemic most of our employees worldwide have been working remotely.
For a brief pause and the first quarter, we hired throughout the remainder of 2020, primarily and client services clients and systems development.
Fixed expenses, which are noninterest expenses less of the variable cost of execution and clearing fees.
For $141 million up 8% driven.
Driven by higher compensation and benefits.
<unk> and occupancy and communications.
G&A expenses were down 6% on the year ago quarter, and 19% sequentially primarily.
Primarily due to the nonrecurring legal and regulate.
And related costs.
The sequential decrease reflects the drop and expenses associated with the development of our enhanced global compliance program, which while still elevated began to roll off.
Customer bad debt expense was immaterial this quarter for the.
Year this expense of $13 million.
And within our typical of $5 million per quarter range.
Reported pre tax income was $392 million up 26% despite of $62 million drop and net.
Net interest income.
For a 65% margin.
Excluding noncore items.
The tax income was $375 million up 19%.
For scent.
The 4% margin.
Diluted earnings per share were <unk> 81 for the quarter versus 57 and a year.
Quarter.
And ex the noncore items diluted earnings per share were <unk> 69.
The 58 for <unk>.
On the 19th and.
And for the full year diluted earnings per share were $2 42 versus $2.10 last year.
And $2 49 versus $2 27 last year as adjusted.
To help investors better understand how our earnings and taxes are split between public shareholders and Noncontrolling interest.
Fourth quarter numbers.
All of them.
Starting with our on adjusted pre tax income of $392 million.
We add back $4 million of Standalone net expense at the public company to get the operating company's pretax income.
We then deduct $4 million for income taxes paid by our operating companies.
Which are mostly foreign taxes.
This leaves $392 million of which 79, 1% for that.
At $309 million reported on our income statement is attributable to non controlling interest.
The remaining 29% or $83 million.
The favorable for the public company shareholders.
As this is the non-GAAP measure it is not reported on.
Statement.
After we deduct the $4 million public companies stand alone net expense.
And.
After expensing remaining taxes of $8 million owed on that 83 million the PA.
All of the company's net income available for common stockholders is the $71 million.
On our income statement.
Income tax expense line of $12 million consists of this $8 million plus the $4 million of taxes paid by the.
Operating company.
And one additional note on income tax the current quarter's tax includes about $11 million and prior period adjustment benefit they are not expected to be recurring including and approximately $8 million net benefit related to the revaluation of our deferred tax asset.
Which is included in our non-GAAP results.
Turning to the balance sheet with $9 billion and and.
The equity at December 31st 2020.
And well capitalized from a regulatory standpoint.
We deploy our strong capital base towards the opportunities to grow our business and investing opportunities worldwide as well as the emphasizes the strength and depth of our balance sheet.
And prospective clients and partners.
Our capital is deployed across 14 registered broker dealer type of entities around the world.
Supporting regulatory capital requirements liquidity needs margin lending and other financing opportunities and our growing brokerage business and.
And we continue to carry no long term debt.
With that I will turn the call back over to the moderator and.
The question.
Yeah.
Thank you as a reminder to ask the question you would need the press Star then one on your telephone to withdraw your question. Please press the pound key.
Our first question will come from the line of Rich Repetto with Piper Sandler Your line is now open.
Hey, good evening, Thomas and good evening Paul.
Congrats on the strong quarter and I'm, just trying to see whether on the expenses. When you look to the forward year to 2021.
And we still going to invest I think.
The the guidelines has been somewhere around 15%.
So what's your view on expenses of the coming year, I guess Thomas and Paul.
The problem the.
The increase expenses of lease.
And as he's trying to build out.
On the new and duty.
And of course continue to build our own costumers and reseller comply and skateboard men's and our ability to grow.
Create new software.
It's all of that bought the growing decom.
All right I understand.
Another your margin balances went up.
Pretty robustly in December and that's sort of the seasonal pattern, but.
Irregardless.
Rebound the margin rebound and dramatically from our March when.
When it hit 19 billion, but I guess, it's still when you look at the average margin balance per account or margin balances as a percentage of overall client equity there's still.
Relatively lows.
I'm just trying to see you know Thomas whether you are.
How optimistic that you think that the new all of the new accounts.
We'll.
Ultimately lever up and have similar.
Similar margin balances to the.
You've experienced in the years past because all the other metrics as far as trading client equity.
They're in line and felt like you got a different accounts does it appear.
But the supply.
And that's why I'm battery.
Hey.
[laughter].
I'm basically.
The margin that is not the increasing.
But the ads can be do by being by far the lowest.
And by far the otherwise margin range.
And it's it's.
It's not that our current customers don't borrow more.
Questioning why people who are on.
And the brokers banks for a 5% by day don't come on.
And yet and the other.
Yeah, Okay sorry.
And so I don't know the answer.
Yes.
Yeah.
Okay. One last quick one the diluted share count went up.
Quarter over by almost.
Almost $10 million or so and I know that's more than just you sell and I know, there's no economic impact, but could you give us some color on on.
Whats happening there.
And some some of our other inc.
And those shareholders had sort of chairs.
Unfortunately too early.
[laughter].
Yeah exactly yeah.
All right.
Yeah.
Okay. Thank you very much Thomas.
Yeah.
Thank you. Our next question comes on the line of Craig Siegenthaler with Credit Suisse. Your line is now open.
Good evening, everyone. Thank you for taking my question.
I just wanted to learn how your three brokers in the European Union, and we're running including the new entity and Hungary, and the recently approved broker and Ireland and I wanted to see if they were now handling all of the trades for EU clients. They were able to be transitioned from the London broker.
So that we are in the midst of transitioning these accounts they have not all been transition, but most of them had been and yes. So that's the debt.
The Zip line.
At the end of demand that will be completed and.
And the plan of these too.
And we as two two and on all of the <unk> clients for them.
Ireland, Luxemburg and Budapest.
Got it and then how much capacity is there for future growth.
On the EU, because I think youre and Luxembourg entity, maybe somewhat constrained, but I think theres actually probably a lot of upside for growth.
And the and the Irish entity.
The days of although all of that.
Side and Ireland.
So of Europe, and that's exactly the IV within those two entities.
We don't see on the lift and great.
Okay.
Got it Thomas Thank you for taking my questions. Thank.
Thank you.
Thank you. Our next question comes on the line of will Nance with Goldman Sachs. Your line is now open.
Hey, guys good afternoon.
I think most of my questions have already been asked and I did have one or two just a quick housekeeping one on the set of cash yields I think you hit six basis points for this quarter is that a fairly decent run rate and kind of fully reprice for the current rate environment, and then related to that you mentioned and keeping the duration short and other.
Theres been some steepening of the curve, although I wouldn't exactly call it compelling and I think shorter dated treasuries are still fairly flat. So when we think about the ability to kind of extend the duration of the segregated cash portfolio like how.
How much Steepening do you kind of need to see for that to actually become worth the time and duration.
I would be much too scared to extend the duration because of.
I think inflation must be looking and the bushes.
And to understand all weekend.
The issue Trulia.
It really ends of dollars of new money every other months and not see the day inflation.
On the east and what goes on.
It can't go on like the sort of it.
Got it Okay, and then just maybe a follow up on Rich's question on the margin balances. Just you guys do typically see a bit more a bit more year end seasonality on margin balances than I think others and.
Some of the industry data points are pointing to a really strong numbers in January and kind of retail trade and continuing to be very robust.
Are you seeing are you seeing that the kind of continue to flow through on margin balances and a month to date and any color on whether you've seen the same sort of trends and trading activity.
Well, you'll have to excuse us, we do and I'll talk about events batch. The E. Then.
Okay.
Got it in other words I thought I'd try alright, but thank you for taking my question.
Sure.
Thank you. Our next question comes on the line of Kyle Voigt with K B W. Your line is now open.
Hi, good evening.
Thomas pretty activity was up a 160% year on year and the fourth quarter. Just wondering if you could help frame how much of that increase is being driven by.
Clients that were acquired in 2020 versus clients that were already already on the platform previously just trying to get a sense of how and how much of the activity is really driven by each of these new clients instead of recently joined.
So the so the new clients trade, a little bit less but not by much.
That's the answer so a new client okay.
And it's probably trade there on the 80 to 85 per cent as much as the old ones.
Okay. That's helpful.
And you mentioned really strong growth in Europe and Asia.
And any any more color on which countries youre seeing especially strong trends within that.
Wow.
Pricing the kind of values all of the strong desk.
And you know.
And in Europe, its mostly eastern Europe.
And the hei.
It's the same on you know on.
All of them Singapore.
Uh huh.
And.
And the surrounding.
Countries.
Thank you.
That actually diminished from China.
Probably because of the difficulty of getting money out.
Right.
And then also just a question on and I think I'd be card notes launched in the quarter for credit investors and I was wondering if you could just describe that that program and in more detail and just wondering what you're earning on cash that's net.
And on client cash investments of that program is there a fee to.
Taking on that.
Or could you address the question, yes sure.
You know for us it's opportunistic when we get opportunities the place money at higher rates, we do.
On the notes program gives us some flexibility after using.
Otherwise the house capital.
Yet at the Rep.
Short term relatively high rates of the investor. It started it up about 50 basis points and and then we ratchet it up two 1%.
Hum and.
And they can and they can rollover and in other words, and we can redeem them at any time.
Feel that the opportunities are no longer there are temporarily no longer there. So it seems to be a very good program for us so far and you've got some pretty good take up from the start.
And any way to quantify that at all of Paul sorry.
The notes and term notes.
Sorry in terms of the take up thus far.
I think we were at 90 something million by the end of the year.
Got it okay. Thank you very much.
Sure.
Thank you. Our next question comes from the line of Chris Allen with Compass point. Your line is now open.
Good evening everyone.
Most of my questions have been.
Asked and answered just wanted to maybe if you can give us some color on other fees and services, so very nice year over year growth sequential growth.
Whether that's being driven by market data payment for order flow or other factors.
So it's mostly market data.
Exposure of fees that.
The charge too.
Costumers who's who.
Yeah.
And.
Basically be on the profile.
Oh come on violate certain.
The niche that we like the dog and because we basically the we've not looking to expand and you're not looking to collect on on.
On the exposure fees all of the real purpose is to try to get the client to rain and there is skin day position.
But nevertheless, it contributes to our income bucks on the along the wrong.
For you that would be paid the dog and.
And losses.
On the costumers and not be.
We're able to and can make good though.
What about the other item and you said for.
All of a day.
The the payment on the order for always comes from the IPO.
Our lives of God's right.
Yeah no.
And the payments for order flow that go into other fees and services are actually the exchange mandated programs and options exchanges, where the rebate.
Part of the liquidity of producing orders.
The to the extent there the.
So the payment for order flow on the IV care of light actually net into the commission.
Oh, that's accounting convention.
But.
It's clear how that comes out and.
I was going to mention that and market data, although it's the larger the largest item and that category.
And it's primarily of pass through right, we pay for market data and then we collect on market data and we.
And we make us the small spread on.
And then the and even.
The change in terms of how many accounts and trades weighted.
On the floor of this quarter versions of the prior quarters.
Yeah.
Yeah.
I'm, just wondering I'd be care of late.
Percentage of trades and accounts of the I was wondering about 5% of accounts and.
Congrats on the trades and the protocol.
It's fairly stable around those numbers.
The call of duty.
Now that we are integrating with the folio.
Costumers, some some 60000 customers that come and go there.
Flipping them all into the IBP our lives so and I believe it's up to them day, one to switch the throat. So you will see the day.
The proportion of of live customers shut off by the end of the months.
Got it.
Thank you that's it for me.
Thank you there are no further questions in the queue. At this time I would now turn the call back to Nancy Stuebe for closing remarks.
Thank you everyone for participating today as a reminder of this call will be available for replay on our website and will be putting up of clean version of our transcript on the site tomorrow. Thank you again, and we will talk to you next quarter and.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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The growth.
Okay.
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