SCHW Charles Schwab Corporation

The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of August 2024 include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240916701159/en/

• Core net new assets brought to the company by new and existing clients increased to $32.8 billion for the month, up from $4.9 billion in the prior year period. August 2023 asset gathering included the impact of the anticipated attrition ahead of our September 2023 client conversion weekend – the largest of the five total transition weekends.
• Total client assets equaled $9.74 trillion as of month-end August, up 20% from August 2023 and up 2% compared to July 2024.
• New brokerage accounts totaled 324 thousand in August, an increase of 4% versus August 2023.
• Driven by typical August seasonality observed during the current interest rate cycle, transactional sweep cash declined modestly versus the prior month to $366.8 billion. This month-over-month decline represents an improvement of approximately 70% and 85% relative to August 2023 and August 2022, respectively.
• As of mid-September, quarter-to-date net changes in transactional sweep cash are trending favorable to the first half of 2024, enabling a reduction in the amount of outstanding supplemental funding at the bank relative to the prior quarter-end level.
• The company currently anticipates its third quarter results to finish in-line with the scenario outlined during the July Business Update. Total revenue is expected to grow by 2% - 3% versus the prior quarter, with an adjusted(1) pre-tax profit margin of at least 40%. These anticipated quarterly results reflect healthy investor engagement across Schwab’s modern wealth platform and the continued slowing of rate-related client cash realignment activity.

(1)

Adjusted pre-tax profit margin is calculated as total net revenues less adjusted total expenses, which exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, as a percentage of total net revenues. Pre-tax quarterly non-GAAP adjustments are estimated to range between approximately $150 to $200 million during 2024.

Forward-Looking Statements

This press release contains forward-looking statements relating to third quarter sweep cash, supplemental funding balances, client engagement, revenue, pre-tax profit margin and non-GAAP adjustments.

These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations. Important factors that may cause such differences are described in the company’s most recent reports on Form 10-K and Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on the company’s website (https://www.aboutschwab.com/financial-reports) and on the Securities and Exchange Commission’s website (https://www.sec.gov). The company makes no commitment to update any forward-looking statements.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 35.9 million active brokerage accounts, 5.4 million workplace plan participant accounts, 1.9 million banking accounts, and $9.74 trillion in client assets as of August 31, 2024. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org), and its affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

The Charles Schwab Corporation Monthly Activity Report For August 2024      

2023

2024

Change   Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Mo. Yr. Market Indices (at month end)   Dow Jones Industrial Average®  

34,722

 

33,508

 

33,053

 

35,951

 

37,690

 

38,150

 

38,996

 

39,807

 

37,816

 

38,686

 

39,119

 

40,843

 

41,563

 

2%

20%

Nasdaq Composite®  

14,035

 

13,219

 

12,851

 

14,226

 

15,011

 

15,164

 

16,092

 

16,379

 

15,658

 

16,735

 

17,733

 

17,599

 

17,714

 

1%

26%

Standard & Poor’s® 500  

4,508

 

4,288

 

4,194

 

4,568

 

4,770

 

4,846

 

5,096

 

5,254

 

5,036

 

5,278

 

5,460

 

5,522

 

5,648

 

2%

25%

Client Assets (in billions of dollars)  

 

 

Beginning Client Assets  

8,241.0

 

8,094.7

 

7,824.5

 

7,653.4

 

8,180.6

 

8,516.6

 

8,558.1

 

8,879.5

 

9,118.4

 

8,847.5

 

9,206.3

 

9,407.5

 

9,572.1

 

 

 

Net New Assets (1)  

8.1

 

27.2

 

5.0

 

19.2

 

42.1

 

14.8

 

31.7

 

41.7

 

10.0

 

31.0

 

33.2

 

29.0

 

31.5

 

9%

N/M

Net Market (Losses) Gains  

(154.4

)

(297.4

)

(176.1

)

508.0

 

293.9

 

26.7

 

289.7

 

197.2

 

(280.9

)

327.8

 

168.0

 

135.6

 

134.1

 

 

 

Total Client Assets (at month end)  

8,094.7

 

7,824.5

 

7,653.4

 

8,180.6

 

8,516.6

 

8,558.1

 

8,879.5

 

9,118.4

 

8,847.5

 

9,206.3

 

9,407.5

 

9,572.1

 

9,737.7

 

2%

20%

Core Net New Assets (1,2)  

4.9

 

27.1

 

11.3

 

21.7

 

43.1

 

17.2

 

33.4

 

45.0

 

1.0

 

31.1

 

29.1

 

29.0

 

32.8

 

13%

N/M

Receiving Ongoing Advisory Services (at month end)  

 

 

Investor Services  

552.2

 

533.0

 

522.2

 

557.0

 

581.4

 

584.1

 

601.8

 

618.5

 

602.2

 

624.0

 

632.9

 

649.1

 

663.7

 

2%

20%

Advisor Services (3)  

3,554.2

 

3,448.0

 

3,380.3

 

3,604.4

 

3,757.4

 

3,780.4

 

3,902.5

 

4,009.5

 

3,893.9

 

4,027.3

 

4,090.0

 

4,185.4

 

4,268.1

 

2%

20%

Client Accounts (at month end, in thousands)  

 

 

Active Brokerage Accounts  

34,440

 

34,540

 

34,571

 

34,672

 

34,838

 

35,017

 

35,127

 

35,301

 

35,426

 

35,524

 

35,612

 

35,743

 

35,859

 

-

4%

Banking Accounts  

1,798

 

1,799

 

1,812

 

1,825

 

1,838

 

1,856

 

1,871

 

1,885

 

1,901

 

1,916

 

1,931

 

1,937

 

1,940

 

-

8%

Workplace Plan Participant Accounts (4)  

5,037

 

5,141

 

5,212

 

5,212

 

5,221

 

5,226

 

5,268

 

5,277

 

5,282

 

5,345

 

5,363

 

5,382

 

5,373

 

-

7%

Client Activity  

 

 

New Brokerage Accounts (in thousands)  

311

 

280

 

284

 

286

 

340

 

366

 

345

 

383

 

361

 

314

 

310

 

327

 

324

 

(1%)

4%

Client Cash as a Percentage of Client Assets (5)  

10.4

%

10.8

%

11.2

%

10.7

%

10.5

%

10.5

%

10.2

%

10.0

%

10.2

%

9.9

%

9.7

%

9.6

%

9.5

%

(10) bp

(90) bp

Derivative Trades as a Percentage of Total Trades  

24.4

%

24.2

%

23.2

%

23.1

%

21.8

%

21.8

%

22.2

%

21.9

%

22.1

%

21.9

%

21.3

%

21.2

%

20.8

%

(40) bp

(360) bp

Selected Average Balances (in millions of dollars)  

 

 

Average Interest-Earning Assets (6)  

449,483

 

444,864

 

438,522

 

439,118

 

446,305

 

443,694

 

434,822

 

431,456

 

423,532

 

415,950

 

417,150

 

417,379

 

420,191

 

1%

(7%)

Average Margin Balances  

64,226

 

64,014

 

63,946

 

61,502

 

62,309

 

61,368

 

63,600

 

66,425

 

68,827

 

67,614

 

69,730

 

73,206

 

73,326

 

-

14%

Average Bank Deposit Account Balances (7)  

101,928

 

100,404

 

97,893

 

94,991

 

95,518

 

95,553

 

92,075

 

90,774

 

88,819

 

86,844

 

85,195

 

83,979

 

82,806

 

(1%)

(19%)

Mutual Fund and Exchange-Traded Fund   Net Buys (Sells) (8,9) (in millions of dollars)   Equities  

(278

)

675

 

(3,039

)

6,099

 

7,903

 

8,182

 

7,624

 

10,379

 

3,472

 

5,734

 

3,379

 

10,908

 

5,609

 

Hybrid  

(1,037

)

(828

)

(1,457

)

(1,466

)

(1,596

)

(501

)

(1,330

)

(439

)

(703

)

(558

)

(843

)

(1,155

)

(1,377

)

Bonds  

4,696

 

2,723

 

1,094

 

255

 

6,104

 

7,510

 

9,883

 

7,561

 

5,949

 

5,854

 

6,346

 

8,651

 

10,919

 

Net Buy (Sell) Activity (in millions of dollars)   Mutual Funds (8)  

(6,476

)

(5,853

)

(12,245

)

(9,267

)

(7,406

)

(966

)

(1,348

)

(1,607

)

(4,818

)

(5,544

)

(4,254

)

(4,679

)

(4,003

)

Exchange-Traded Funds (9)  

9,857

 

8,423

 

8,843

 

14,155

 

19,817

 

16,157

 

17,525

 

19,108

 

13,536

 

16,574

 

13,136

 

23,083

 

19,154

 

Money Market Funds  

16,869

 

13,388

 

16,976

 

11,670

 

7,745

 

11,717

 

10,129

 

9,085

 

(2,357

)

9,790

 

3,858

 

9,110

 

8,048

 

 

 

Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.

(1)

 

Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs. 2024 also includes an outflow from a large international relationship of $0.1 billion in August and an inflow of $10.3 billion from a mutual fund clearing services client in April. 2023 also includes outflows from a large international relationship of $0.8 billion in September, $6.2 billion in October, $5.4 billion in November, and $0.6 billion in December.

(2)

 

Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods.

(3)

 

Excludes Retirement Business Services.

(4)

 

Beginning October 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Prior periods have been recast to reflect this change.

(5)

 

Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets; client cash excludes brokered CDs issued by Charles Schwab Bank.

(6)

 

Represents average total interest-earning assets on the Company's balance sheet.

(7)

 

Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.

(8)

 

Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers. Excludes money market fund transactions.

(9)

 

Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

 

 

N/M - Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240916701159/en/

MEDIA: Mayura Hooper Charles Schwab Phone: 415-667-1525

INVESTORS/ANALYSTS: Jeff Edwards Charles Schwab Phone: 817-854-6177