COL Financial net income drops 58% because PSE
COL Financial [COL 0.18; 3% avgVol] [link] disclosed that it made P242 million in net income in FY22, down 58% from the P581 million that it made in FY21.
COL is owned by Edward Lee, and is the country’s largest discount brokerage.
COL reported that its client base grew only 5% to 516,247 by the end of 2022, while its customers’ net equity actually declined over 6% during that same time span.
COL said that due to a confluence of external factors (inflation, interest rates, war, strong US Dollar, the PSEi ended FY22 down 7.8% with a daily turnover rate that was down by more than 14%.
COL’s interest income (the amount of money that it makes off of depositing our brokerage balances) increased 84.7% to P336 million thanks to the higher interest rates, but this increase was not able to match the 59% drop in COL’s commissions (from P1.0 billion down to P0.4 billion).
MB BOTTOM-LINE
You mean the country's largest discount brokerage so far. Fewer new customer accounts, and those that join are doing so with accounts that are clearly “non-whale”. Not a good look for a discount brokerage that only makes money off of trade volume and the interest off its customer’s deposits.
If I were COL, I’d be less concerned about how a bunch of external, uncontrollable factors made trading less frequent for its traders, and more concerned about the coming GCash and AB Capital team-up that is clearly positioned to eat COL’s lunch.
COL’s been the only game in town for over a decade when it comes to easy-as-dirt Level 1 retail trading, and they’re about to get lapped by an upstart that promises a tutorial-level trading experience.
COL’s system does feel technical or reliable enough to attract new whales, and it doesn’t feel easy or accessible enough to compete with the ominous simplicity of the looming GCash/ABCap behemoth.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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