Schwab (SCHW) Q1 Revenues to Rise, February Client Assets Soar
Charles Schwab SCHW released its monthly activity report for February 2024 and provided revenue guidance for the first quarter of 2024.
Management projects the ongoing quarter’s revenues to grow in the range of 5-6% on a sequential basis. This is to be driven by “rising equity markets and stronger client trading activity.” Further, as the full impact of last year’s incremental expense savings is realized, the adjusted pre-tax margin is expected to expand almost “four percentage points.”
In February, Schwab’s core net new assets of $33.4 billion soared 94% from the previous month’s level but declined 20% from the year-ago month’s figure.
Schwab’s total client assets in February 2024 were $8.88 trillion, up 4% from the January 2024 level and 20% from February 2023. Client assets receiving ongoing advisory services were $4.5 trillion, up 3% from the prior month and 18% year over year.
Schwab’s average interest-earning assets of $434.8 billion in February declined 2% from the January 2024 level and 14% year over year. Average margin balances were $63.6 billion, up 4% from the previous month’s level and 5% on a year-over-year basis. Average bank deposit account balances totaled $92.1 billion in January, down 4% from last month’s actuals and 20% from February 2023.
The company opened 345,000 new brokerage accounts in February 2024, down 6% sequentially but up 8% from the year-earlier month’s figure.
Schwab’s active brokerage accounts totaled 35.1 million at the end of February 2024, which was stable on a sequential basis and grew 3% from the year-ago month’s figures. Client banking accounts were 1.87 million, up 1% sequentially and 8% from the February 2023 figure. The number of workplace plan participant accounts was up 1% from the prior month’s level and 9% year over year to 5.27 million.
In the past six months, shares of Schwab have rallied 15.1% compared with the industry’s rise of 11.4%.
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Currently, SCHW carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Interactive Brokers Group, Inc. IBKR released the Electronic Brokerage segment’s performance metrics for February 2024. The segment deals with the clearance and settlement of trades for individual and institutional clients globally. It reported a rise in client Daily Average Revenue Trades (DARTs) on a sequential and year-over-year basis.
IBKR’s total client DARTs for February were 2,243,000, which increased 11% from January 2024 and 15% year over year.
Another brokerage firm, LPL Financial LPLA is expected to come out with its monthly activity report soon.
Currently, IBKR and LPLA have a Zacks Rank #3 each.
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