The Charles Schwab Corp. today reported a 31% decline in second-quarter earnings from the year-earlier period, citing low interest rates, restructuring charges and still-weak equities markets.
The Charles Schwab Corp. today reported a 31% decline in second-quarter earnings from the year-earlier period, citing low interest rates, restructuring charges and still-weak equities markets.
The San Francisco-based company said active retail engagement during the quarter, generated by the first market-driven improvement in the Standard & Poor's 500 stock index since the third quarter of 2007, helped offset some of the problems.
Schwab added $17 billion in net new assets and 197,000 new brokerage accounts during the quarter, although total client assets were down 12% from June 30, 2008.
“As we enter the second half of 2009, the economic and market outlook remains challenging,” chief executive Walt Bettinger said in a statement.
He noted that while broad equity indexes rose, they still ended the quarter 20% to 30% below their year-earlier levels. Meanwhile, government monetary policy continues to keep short-term interest rates at unprecedented, near-zero levels that eroded fees for margin accounts and money market funds.
“Since both of these factors have a significant influence on the company's revenues, we remain focused on disciplined financial management,” Mr. Bettinger said.
Schwab reported net income of $205 million, or 18 cents a share, down from $295 million, 26 cents a share, in the year-earlier quarter.
Client assets in businesses for registered investment advisers fell 12%, to $505.4 billion, but were up 11% from the end of this year's first quarter.
Net growth in assets in RIA accounts fell 47%, to $7.7 billion, a steeper drop than in Schwab's retail business.
The results were in line with the forecasts of analysts.
