COL Financial Q3 commissions up 41% y/y

COL Financial [COL 1.76, up 0.6%; 13% avgVol] [link] reported a Q3 net income of P166 million, up 30% y/y from its Q3/23 net income of P128 million, thanks to a 24% increase in comprehensive revenues led by a 41% y/y increase in commissions to P110 million (up from P78 million). The Lee Family’s discount brokerage saw its revenues additionally boosted by higher interest income (+13% y/y) that the company earns on client deposits. On a 9M basis, COL reported a 3.3% jump in user accounts to 548,285 thanks to “active social media campaigns, investment webinars... participation in financial forums, and targeted email campaigns.”

MB bottom-line: COL’s Q3 results are basically derivative of the PSEi’s 13% move from 6,411 on July 1 to 7,272 on September 31. Volumes were significantly higher, and for brokerages like COL that earn through activity, anything like a bull market that breaks through psychological barriers and gets a lot of attention from mainstream news outlets will help the bottom line. In COL’s case, it helps the bottom line twice by encouraging greater trading volumes and also attracting new investors to the market. Those new investors open up accounts and deposit money, which COL then takes and deposits elsewhere to earn interest for itself. I thought it was very interesting to see COL reaping the rewards of its user acquisition efforts. It feels like COL now recognizes that it is in a fight to retain its position as the dominant discount brokerage now that we have several startups like DragonFi and Luna competing for the small-timer’s attention, and several platform-based digital trading options on the precipice of being fully formed, like GStocks and Maya Stocks. The competition is good, and this response by COL is probably a welcome change for its shareholders.    

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