- Charles Schwab Corp SCHW reported Q1 net revenues of $5.11 billion, up 10%, missing the consensus of $5.15 billion.
- Net interest revenue increased 27% Y/Y to $2.77 billion, with net interest margin expanding 81 basis points Y/Y.
- Although the bank witnessed a dip in the average daily pace of bank sweep movements from January to March 2023, it benefitted from higher asset yields from the Federal Reserve's tightening program in the quarter.
- Also read: Charles Schwab's Q1 Earnings Preview: Analysts Slashed EPS Ahead of The Release, All Eyes On Deposit Outflows Post Banking Crisis
- Asset management and administration fees increased slightly to $1.12 billion from $1.07 billion, while trading revenue declined to $892 million in Q1 from $963 million a year ago.
- Bank deposit account revenue declined to $151 million from $294 million a year ago, partly due to a one-time brokerage fee of $97 million related to agreement cancellation with a third-party bank ahead of the initial Ameritrade client transition group.
- Bank deposits declined 30% Y/Y to $325.7 billion as clients realigned their allocations across other transaction and investment cash solutions.
- Total expenses rose 6% Y/Y to $3.00 billion, which includes acquisition and integration-related costs of $98 million and $135 million in amortization of acquired intangibles.
- Net flows into Managed Investing solutions grew 26% Y/Y, reaching $8.9 billion in Q1.
- In Q1, the bank opened over 1 million new brokerage accounts, comprising $132 billion worth core net new assets ($53 billion in March 2023).
- Adjusted net income stood at $1.78 billion, higher from $1.59 billion in the prior year.
- Adjusted EPS stood at $0.93, up 21% Y/Y, exceeding the consensus of $0.90.
- Buyback: Charles Schwab has paused its buyback program in light of the recent events within the U.S. banking sector and the resulting regulatory uncertainty.
- Total assets decreased 21% Y/Y to $535.6 billion. Tier 1 leverage ratio stood at 7.1% in Q1.,
- In January, SCHW raised its quarterly dividend by 14% Q/Q to 0.25.
- Price Action: SCHW shares are trading higher by 2.19% at $51.88 on the last check Monday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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