KCG Holdings has announced its quarterly figures for Q2 2016 with the company reporting consolidated earnings totaling $33.6 million, which is $0.38 per diluted share. Income before taxes totaled $54.6 million, which included a gain of $33.4 million from the sale of the BATS Global Markets stake which the company held.
Total revenues amounted to $319.9 million, which is lower by 7.3 per cent when compared to the first quarter of 2016, but higher by about 22 per cent when compared to a year ago. Pretax income totaled $54.5 million, which is a complete reversal from a year ago when the company reported a $57 million loss.
KCG increased its market share in U.S. equity trading diving by over 2 per cent in the quarter and its fixed income trading unit, KCG BondPoint, setting a new quarterly record for trading volumes.
The BATS Global Markets share of KCG was sold to mark a pre-tax gain of $33.4 million.
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Commenting on the results, the CEO of KCG, Daniel Coleman, said: “Despite relatively poor market conditions for most of the second quarter, KCG produced reasonable financial results. KCG market making in U.S. equities had another strong quarter with a revenue capture of 1.07 basis points. In addition, our franchise ETF desk and KCG BondPoint both showed continued growth in revenues and market share.”
“The results were further lifted by a sizeable gain from the sale of a portion of the company’s investment in Bats, a part of the proceeds from which went toward funding more than $60 million in stock and warrant repurchases during the quarter,” the CEO of the company elaborated.
KCG Holdings Market Making
Looking at the market making segment of KCG, the business generated total revenues of $211.8 million with and pre-tax income of $40.5 million. The revenues were lower by 18 per cent when compared to last quarter while income dropped 46 per cent.
Mr. Coleman commented, “Although the market for U.S. equities was relatively quiet until the tail end of the quarter, KCG Market Making produced strong results. The performance of quantitative trading models and market share gains of retail order flow drove the performance. Notwithstanding, lower realized volatility constrained results as did the broad declines in market volumes for certain asset classes and products year over year.”