Futu and Tiger each derived about 44% of Q2 revenue from interest

Two large cross-border online brokerage groups ended the June 2026 quarter with strikingly similar interest-income dependence despite quite different customer bases and financial reporting currencies. Futu Holdings Limited reported HK$3,123.8 million of interest income on HK$7,200.2 million of total revenue, or 43.38%. UP Fintech Holding Limited, the parent of the Tiger Brokers business, reported US$79.8 million of interest income on US$182.3 million of revenue, or 43.77%. An independent comparison of their company releases places the two ratios less than half a percentage point apart. That coincidence is economically important but does not mean their regulated subsidiaries operate the same products or carry identical risk.[1][2]

The second part of the reconstruction separates gross interest received from disclosed funding expense. Futu reported HK$512.9 million of interest expense; subtracting that from HK$3,123.8 million yields an indicative HK$2,610.9 million interest balance, equivalent to 36.26% of reported revenue. UP Fintech reported US$21.5 million interest expense, leaving an indicative US$58.3 million balance, equivalent to 31.98% of revenue. These are mechanical revenue-minus-interest-expense comparisons, not each company's official net-interest-income segment or an allocation of all operating costs. No exchange-rate conversion is necessary because each percentage uses its own group's currency.[1][2]

Why does this matter to brokerage clients? The growth story of a zero-commission or low-commission digital investment platform can make order execution look like the central business activity. In reality, publicly reported interest income—earned from activities including margin financing, securities lending and deposits—may contribute almost as much gross revenue as commissions. That raises legitimate questions about what terms determine customer financing charges, what rates are passed through to clients, how account balances are invested or held, and which legal entities are responsible. It does not, by itself, establish unfair pricing, breaches of client-money rules or conflicts that were actually exploited.[1][2]

A more exact peer comparison would separate three layers of financing activity. First is the contractual customer interest rate on a margin loan, securities borrowing arrangement or idle cash balance. Second is the group's actual revenue recognition, which may include interest on several types of assets or rebates earned in market financing. Third is the interest expense associated with funding those assets and liabilities. Even after those three are matched, the reported spread is not net profit because the broker incurs clearing, compliance, loan servicing, operational, liquidity and credit costs. These layers explain why the nearly equal 44% gross-interest shares are a defensible industry observation but not a shortcut for calculating each company's customer margin markup or any individual borrower's effective rate.[1][2]

A second test concerns how the financial side grows relative to trading. Futu said trading volume climbed 78.8% year on year while interest income increased 36.5%; UP Fintech's commissions increased 20.9% while interest income rose 36.0%. The rates are measured on different operating metrics and reporting currencies, so they cannot prove that financing replaced trading at either company. They do, however, show why a broker can improve its consolidated results without every activity growing at the same pace. A broad investment case based solely on funded-account additions can miss the effects of market rates, client trading intensity and loan balances. Each metric has to be tied to the proper time period and regulatory entity before it is used to describe unit economics.[1][2]

Futu: loan balances grew faster than the account base

Futu's August 20 announcement says funded accounts rose 33.6% year on year to 3,842,667 at June 30, 2026, while client assets increased 43.6% to HK$1.40 trillion. Total second-quarter trading volume increased 78.8% to HK$6.42 trillion. Against those metrics, the reported margin-financing and securities-lending balance increased 85.1% to HK$95.1 billion. That is faster growth than the funded-account count or the stock of client assets on a year-on-year percentage basis. It is a notable financing expansion but not, on its own, evidence that the typical client became 85% more leveraged.[1]

Financing and lending balances are a stock at quarter-end. Revenue is a flow for the three-month period, generated by averages, rates and commercial terms through time. The HK$95.1 billion therefore cannot simply be multiplied by a quarterly interest figure to infer a single customer rate. The business includes margin loans, securities lending and deposit-related interest; the quarter's interest income reflects a mixture of balances, pricing and changes in market yields. The company explicitly identifies margin financing and bank deposits as contributors to interest growth. A customer-level borrowing-cost comparison would require contract-specific rates, outstanding balance dates and the composition of interest-bearing assets.[1]

Futu's revenue mix can be fully reconciled: brokerage commission and handling charges were HK$3,360.6 million, interest was HK$3,123.8 million and other income was HK$715.8 million. Those categories total HK$7,200.2 million. The commission category represented 46.67% of revenue and interest 43.38%; other income contributed about 9.94%. That is a stronger analytical basis than the imprecise claim that Futu is either merely a trading-commission business or predominantly a margin lender. Both customer transaction services and financing make material contributions to the consolidated result.[1]

Tiger: a smaller revenue base and a different reporting mix

UP Fintech reported funded accounts, described as customers with deposits, rising 10.3% to 1.3154 million at June 30, against client assets of US$60.7 billion and a margin-financing-and-securities-lending balance of US$7.4 billion, up 28.9% year on year. It also reported US$345.27 billion of second-quarter trading volume. These are not the same account definitions, currencies or reporting entity as Futu's figures. A comparison of absolute client balances in Hong Kong dollars with a dollar-denominated group cannot be made without a justified FX translation date and a careful account-perimeter audit. This investigation compares dimensionless revenue shares first.[2]

UP Fintech's revenue sources total approximately US$182.3 million: commissions US$78.3 million, financing service fees US$3.2 million, interest US$79.8 million and other revenue US$21.0 million. The sum is US$182.3 million to reported rounding. Interest alone represented roughly 43.77%, commissions 42.95%, financing service fees 1.76%, and the rest 11.52%. Separating financing service fees from interest also matters: aggregating both produces a broader financing-related measure but would then be less comparable to Futu's three-line disclosure. We use the company-defined interest category for the like-for-like comparison and identify fees separately.[2]

UP Fintech linked rising interest income to margin financing and securities lending for consolidated-account customers, while its financing service fee growth related to margin activities of fully disclosed account customers. This distinction is not cosmetic. A fully disclosed customer arrangement can involve different custody, clearing and financing relationships from an omnibus or consolidated-account arrangement. The group result combines several service types and markets. Customers cannot determine their precise exposure or legal protection merely from a holding-company press release describing the aggregate Tiger Brokers business.[2]

A similar percentage does not imply a common customer rate

The near equality of gross-interest-to-revenue shares, 43.38% versus 43.77%, might tempt readers to conclude that the companies charge similar financing rates or pass through the same share of yields. That would overstate the evidence. Interest income is influenced by lending balances, eligible securities, short-stock demand, deposit rates, customer asset mix and the business's jurisdictional footprint. The filings describe total interest in money terms, not a standardised annual percentage rate for a comparable borrower. A group can have more interest revenue because of a larger asset base, higher rates, more securities loans or some combination of the three.[1][2]

Futu's HK$512.9 million interest expense increased 35.8% year on year, broadly in line with its 36.5% interest-income increase. UP Fintech's US$21.5 million interest expense increased 24.1% against 36.0% interest-income growth. The second group's gross interest spread after its disclosed interest expense thus expanded by a faster percentage than its interest revenue, though a complete year-on-year net calculation would need precise prior-period expenses and the consistent definition of each line. The current-quarter balance is a first-order indicator of financing economics, not net profit for the lending operation.[1][2]

Nor does the difference between 36.26% and 31.98% describe whose client is better off. An interest spread retained by a group funds its own capital, technology, bad-debt, hedging, compliance, payment and servicing costs. A higher percentage of total company revenue can arise simply because other revenue streams are smaller. A borrower comparing margin rates should examine the actual interest schedule for their legal entity, product and currency, including benchmark, markup, minimums and daily accrual conventions. A cash customer should instead ask what remuneration applies to uninvested balances and who legally holds them.[1][2]

Both firms' releases describe customer assets as growing, but the amounts must be interpreted carefully. Futu's HK$1.40 trillion is a reported client-assets total, not Futu revenue or a balance the company may freely deploy. Tiger's US$60.7 billion is similarly a client-account asset stock. Neither number proves all customer securities are available for lending, nor does a high lending balance show that the company reuses each customer's assets. Contract terms and local securities-financing regulations control eligibility and obligations. The group announcements do not identify the distribution of balances across every regulated subsidiary.[1][2]

Which legal entities and customers sit behind the numbers?

Futu Holdings Limited and UP Fintech Holding Limited are publicly reporting parent companies. Their brand platforms serve customers in more than one jurisdiction through operating subsidiaries and relevant service providers. A group-level ratio should never be attributed indiscriminately to a Hong Kong, Singapore, US or Australian brokerage licence. The regulated entity that opens an account, the entity that carries margin balances and the entity named in a client securities-lending programme can differ. Any investigation into actual interest rates or rehypothecation must begin with local account agreements and licence registers, not the holding-company revenue mix.[1][2]

The company announcements are unaudited quarterly releases. They provide a meaningful basis for calculating current revenue composition, but a complete forensic investigation would reconcile the same figures to the subsequently filed six-month financial statements, notes on interest-earning assets and liabilities, and any accounting changes. This report did not obtain borrower-level statements, proprietary securities-borrow fee reports or a complete jurisdiction-by-jurisdiction schedule of customer yields. No claim about individual customer detriment or market abuse is made without such evidence.[1][2]

A plausible alternative explanation for any observed increase in finance revenue is simply higher genuine customer lending demand in a growing platform. Futu's 85.1% lending-balance growth and Tiger's 28.9% growth may reflect more active clients, changing instrument mix or currency markets. They could also reflect product promotions, credit supply decisions or shifts between consolidated and fully disclosed accounts. The public releases do not isolate all these effects. It would be unwarranted to treat interest revenue as automatic evidence of incentives to encourage unsuitable borrowing. A conflicts investigation would need communications, suitability policy and account-level evidence.[1][2]

The industry finding and its limits

The original reporting here is a matched-period, cross-currency-normalised ratio comparison that is traceable to source disclosures. It shows that interest supplied approximately 44% of reported second-quarter revenue at two differently sized global online broker groups. The further net-of-expense calculations show that financing's contribution remains economically significant even after disclosed direct interest expense is considered. This is more informative than a ranking of raw brokerage commission revenue, because it makes the financing component visible rather than treating it as an incidental byproduct.[1][2]

For a broker analyst the next tests are to obtain the average loan and interest-bearing-deposit balances, measure the corresponding effective yield without mixing stocks and flows, compare actual borrowing-rate schedules by entity and currency, and reconcile customer-asset protection arrangements. For regulators, the question is whether finance products are sold and risk-disclosed appropriately, not whether financing revenue exists at all. For customers, the decision should turn on the all-in cost and protection of the specific account. The two corporate releases establish a substantial structural commonality; they do not establish an identical business model or a legal violation.[1][2]

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