(March 15 – 14:20 ET) – The securities industry turned in a stellar performance in 2000 according to figures released today by the Invesment Dealers Association.

Revenues were up 39% year-over-year and operating profit rose 83% to top $3.5 billion.

Return on equity (net earnings to shareholders equity) averaged 20% last year, down modestly from the record bull market peak of 25% in 1996, the IDA says in the Securities Industry Performance report released today.

Retail firms posted record profitability of $355 million, despite recording flat operating profits in the fourth quarter 2000. In fact, nearly 90% of the operating profits for this sector were recorded in the first half of the year.

Operating profits for the industry were $736 million in the October – December 2000 period, down 8% from the previous quarter. Although fourth quarter profits lagged the previous three quarters, the result was still 22% ahead of the fourth quarter 1999.

Fourth quarter operating profits for all business lines of fully integrated firms were down only 1% ($654 million), outperforming the total industry decline of 8 per cent.

Total industry revenues for 2000 sprouted nearly 40% to $12.3 billion, easily outdistancing the previous record of $8.8 billion. Net profit soared as well, up over 100% from the previous year and finishing over $1 billion for the first time ($1.2 billion).

The IDA says the Canadian securities industry outperformed the U.S. industry on a return on equity basis, with the Canadian return averaging 20% last year, up from 12%in 1999. The U.S. return remained steady over the past two years at 17%.

Operating expenses for the industry climbed 11%in the fourth quarter compared to the previous quarter, far outpacing revenue growth. For the year, operating expenses increased 18% from 1999 to $4.7 billion, well below the 39% increase in revenues.

Industry employment grew by 9% over the past year to stand at 39,433, marking the ninth year of annual employment growth.

Commission revenues slipped 3% from the July – September 2000 quarter to $1.2 billion, marking the third consecutive quarter of declining commission revenues.

Mutual fund commissions for the fourth quarter of 2000 were $331 million, essentially flat compared to the previous quarter, yet down markedly from the robust first quarter. For the year, mutual fund revenues totalled $1.5 billion, a new high, up 32% from the previous year. Similarly, total mutual fund sales surpassed previous records with $130 billion of gross sales recorded for the most recent year.

Investment banking revenues, comprised of underwriting fees and M&A activity, finished the year on a high note accounting for $495 million, up 5% from the previous quarter. Revenues from investment banking topped $2.1 billion for 2000, an increase of 29% from 1999.