TD Ameritrade Reports Record Client Activity in Fiscal Second Quarter

The sharp market moves in the first quarter of the year have yielded very strong results for the brokerage industry across multiple asset classes. One of the first retail brokerage firms to report on the outcome of the quarter that ended on March 31st, 2018 is TD Ameritrade. The company’s clients have generated a record amount of trading volumes via the firm’s infrastructure.

During the three months a total of $22.2 billion of net new client assets have been gathered, the number represents growth of 8 percent year-on-year. TD Ameritrade processed on average 943,000 client trades per day during the quarter. The company associated the figures with the “resurgence of volatility” in the equity markets.

Post-Scottrade Integration

TD Ameritrade reported record net revenues of $1.4 billion, a figure that is 12 percent higher quarter-on-quarter and 56 percent higher year-on-year. Asset-based revenues represented 59 percent of the total.

TD Ameritrade’s pre-tax income was $372 million, which is 26 percent of net revenues. The figure is higher by 18 percent when compared to the final calendar quarter of 2017 and by 8 percent when compared to a year ago.

Commenting on the company’s results, CEO Tim Hockey, said: “Early results of our dual strategy to successfully integrate Scottrade while continuing to accelerate and diversify revenue growth in our core business have exceeded our expectations.”

“With the Scottrade client conversion now successfully behind us, we are turning our focus to increasing our momentum and profitably growing our business. Further enhancing the client experience, investing in innovation and employee development, and increasing our competitive edge will be our priorities as we work through the balance of the fiscal year.”

Volatility Key to Record Earnings

The company has accentuated the impact of higher volatility on its earnings as the market conditions became very favorable for the brokerage industry.

The CFO of TD Ameritrade Steve Boyle said: “In our second quarter, market volatility returned in full force as the implications of tax reform became clearer, interest rates continued to rise, and tariff talks surprised the markets. These events drove record revenue in the quarter and more than offset some volatility-related losses.”

The senior financial executive of the brokerage elaborated that Scottrade expense synergies remain on track.

“We expect total operating expenses to decline significantly over the remainder of the fiscal year. Leading with technology remains a key focus that necessitates continued investment in order to enhance our offerings and drive efficient growth in the future.” Mr Boyle concluded.

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