Charles Schwab Corp SCHW reported a Q2 net revenues decline of 9% Y/Y to $4.66 billion, beating the consensus of $4.61 billion.
Revenues were impacted by a temporary rise in the utilization of supplemental funding to enable client cash allocation decisions.
Asset management and administration fees increased 12% Y/Y to $1.17 billion, while trading revenue declined 9% Y/Y to $803 million in the quarter.
Bank deposit account fees revenue declined 50% Y/Y to $175 million in Q2.
Net interest revenue declined 10% Y/Y to $2.29 billion, with net interest margin expanding to 1.87% (vs. 1.62% a year ago).
Bank deposits declined 31% Y/Y to $304.4 billion.
Total expenses rose 5% Y/Y to $2.97 billion, which includes acquisition and integration-related costs of $130 million and $134 million in amortization of acquired intangibles.
Year-to-date, net flows into Managed Investing solutions grew 35% Y/Y.
In Q2, the bank opened over 960K new brokerage accounts (-5% Y/Y), comprising $52 billion worth of core net new assets, ending Q2 with total client assets worth $8.02 trillion across 34 million accounts.
Adjusted net income fell 25% Y/Y to $1.49 billion in Q2.
Adjusted EPS stood at $0.75, down 23% Y/Y, exceeding the consensus of $0.71.
Total assets decreased 20% Y/Y to $511.5 billion. Tier 1 leverage ratio stood at 7.5% in Q2.
"In late May, we completed the conversion of over 5 million Ameritrade accounts to the combined platform. Successfully transitioning what is believed to be the largest number of client accounts in the history of the industry over a single weekend is a testament to the team’s diligent preparation and the tireless work of our dedicated employees. With approximately 30% of client accounts converted thus far, we are on-track to move nearly all of the remaining Ameritrade clients over before year-end – with the final transition group scheduled for the first half of 2024," said Walt Bettinger, Co-Chairman and CEO.
Also Read: Anticipating Charles Schwab's Recovery: JMP Securities Upgrades SCHW Amid Projected Revenue Growth
Price Action: SCHW shares are trading higher by 8.4% at $63.56 premarket on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.