COL Financial, the country’s top online stock broker, reported that its consolidated net income almost doubled to P404.4 million in the first nine months of 2023, up 95 percent from the P207.5 million earned in the same period last year.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said its consolidated revenues during the first nine months of 2023 increased by 38.5 percent to P828.4 million as the favorable impact of higher yields on interest income more than offset the drop in commission revenues. 

Higher margin utilization coupled with the significant increase in interest rates pushed interest income higher by 164.7 percent to P521.2 million during the first nine months of 2023. 

Interest income surged as interest income from both the margin lending business and the placement of funds in bank deposits and fixed income assets increased during the first nine months of the year.

Interest income from the margin lending business rose by 26.8 percent as clients utilized a larger portion of their margin lines on the average.

Meanwhile, interest income from placements jumped by 202.4 percent as interest rates paid by banks increased several folds due to high inflation and continuous rate hikes by the US Fed and the local central bank.

The strong growth in interest income completely offset the negative impact of poor investor sentiment on stock prices, value turnover and commission revenues. 

Commission revenues fell by 26.4 percent to P270.7 million as average daily value turnover in the PSE decreased by 8.3 percent to P6.6 billion during the first nine months of the year. 

Value of stocks traded by local investors which is COL’s target market fell by an even faster pace as evidenced by the drop in local investors’ share of total value turnover to 47 percent during the first nine months of 2023 from 55 percent during the same period in 2022.

Meanwhile, trail fees decreased slightly by 1.6 percent to P16.5 million. This was largely brought about by the change in the composition, in terms of type, of mutual fund assets under administration (AUA).

Although net sales of non-money market funds reached P169.9 million during the past 12 months, the share of higher earning local equity funds and index funds fell to 76 percent of total non-money market AUA as of end-September this year from 79 percent during the same period last year.