Charles Schwab hits record profit on client assets, trading volumes
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The news: US brokerage Charles Schwab beat estimates for third-quarter profits as client assets passed a new record and trading revenue surged.
The numbers: The Texas-based company added core net new assets of USD137.5 billion in the quarter, while total client assets jumped 17% to record USD11.59 trillion.
Profit jumped 67% to a record USD2.36 billion, or USD1.26 per share, in the three months ending 30 September, compared with USD1.3 billion, or 71 cents a share, for the same period last year.
Revenue soared 27% to USD6.14 billion, being the USD6.01 billion predicted by Wall Street. Schwab also posted 25% higher trading revenue on robust volumes, while net interest revenue surged 37%.
The context: Schwab has benefited from increased retail customer interest in investing, with openings of new brokerage accounts surpassing 1 million for the fourth quarter in a row.
President and CEO Rick Wurster said in September that retail investors increasingly want access to private companies, as many firms are staying private for longer, and Schwab is looking into how to give its client greater access to such investments.
“Strengthening organic growth trends, increasing adoption of wealth solutions, and favorable macroeconomic tailwinds powered another quarter of record revenue and earnings per share,” Wurst said in a statement on Thursday.
The sources: Charles Schwab earnings, Reuters, Wall Street Journal
