Schwab Sees Bounce in February Results

Several Charles Schwab blue and white corporate logos on large sign boards

Charles Schwab Corp. client assets reached nearly $8.88 trillion at the end of February, up 4% from $8.56 trillion in January and 20% from $7.38 trillion a year earlier, the company announced Thursday.

Net new assets surged 114% to $31.7 billion in February from $14.8 billion in January but were down 24% from $41.7 billion a year earlier.

Schwab reported nearly $290 billion in net market gains for February.

Core net new assets from new and existing clients — a number that excludes major one-time events such as acquisitions or divestitures, and activity from off-platform Schwab bank retail CDs — totaled $33.4 billion in February.

That's nearly double January's $17.2 billion but down 20% from $41.7 billion a year ago.

Rival Fidelity Investments had total assets under administration of $12.6 trillion and $4.9 trillion in discretionary assets as of Dec. 31, and Vanguard — which just said CEO Tim Buckley will step down by year-end — reported $9 trillion in assets under management.

Other Business Results

Citing rising equity markets and stronger client trading activity, Schwab said it expected about 5% to 6% sequential revenue growth in the first quarter.

The company also anticipates adjusted pretax margins to expand by nearly four percentage points in the first quarter compared with last year's fourth quarter, as it realizes the full effects of late 2023 incremental cost savings measures. This included the beginning of 2,000 layoffs and closures of some smaller leased offices.

Schwab stock, which has ranged from $45.65 to $71.40 over the last 52 weeks, traded at $67 Thursday afternoon, rougly flat for the day and down 3% year to date.

In January, Schwab reported that profits, new assets and deposits declined in last year's fourth quarter, capping a year when higher interest rates hit its financial results.

As Bloomberg reported at the time, Schwab and other financial firms experienced higher funding costs last year as the Federal Reserve raised interest rates and customers shifted cash into high-yield vehicles, including money market funds.

The giant brokerage faced other issues last year as well, reporting that it was losing some assets that had been held at TD Ameritrade. Schwab acquired the firm in 2020 and converted most accounts in 2023.

Photo: Adobe Stock