CHARLES Schwab, one of the largest US brokerages, reported a 20 per cent drop in quarterly profit yesterday, as expected, due in part to lower asset management fees and higher expenses, but said its outlook was improving.
Schwab earned $195m (£122.6m) in the quarter ended 31 March, meeting Wall Street expectations.
Asset management fees were down four per cent at $484m. Expenses rose eight percent to $876m, with compensation and benefits expenses up six per cent at $465m.
Revenue fell one per cent from a year earlier to $1.19bn.
Schwab’s core net new assets rose by $26.9bn, the most since the first quarter of 2008, and 13 per cent above analyst estimates.
Overall assets stood at a record $1.83 trillion.
Schwab clients opened 240,000 new brokerage accounts in the quarter and made an average of 318,400 revenue trades per day in the quarter. That was flat from a year earlier, before Schwab bought options trading specialist optionsXpress.
Nomura analyst Keith Murray described the trading levels as “sluggish”, but said the results were mostly positive.
“A decent result given the challenging rate backdrop and core growth metrics continue to head in the right direction,” Murray said.
City A.M. Reporter