Charles Schwab Reports Asset Management Growth amid 16% Decline in Q3 Revenue

<p>Charles Schwab, the US brokerage firm, exceeded Wall
Street's expectations in its third-quarter earnings report, highlighting robust
growth in asset management business. The company's remarkable performance was
driven by a surge in fees, leading to an increase of 5.4% in its stock price,
according to a report by Reuters.</p><p>Charles Schwab's impressive performance in the third
quarter occurred at a time when the financial industry has been grappling with
challenges. Schwab reported an increase of 17% in asset management and administration fees, totalling $1.22
billion, during the period. </p><p>Charles Schwab's Earnings Defy Expectations </p><p><a href="https://www.financemagnates.com/tag/charles-schwab/" target="_blank" rel="follow">Charles Schwab</a>'s Chief Financial Officer, Peter
Crawford, said: "During the quarter, our balance sheet management
continued to prioritize flexibility in support of our growing client base. In
late August, we issued approximately $2.4 billion of senior notes across two
tranches due in 2026 and 2034, further bolstering our diversified <a href="https://www.financemagnates.com/terms/l/liquidity/">liquidity</a>
profile."</p><blockquote><p lang="en" dir="ltr">SCHW September core net new assets exceeded $27 billion: <a href="https://t.co/CyMagax6Ct">https://t.co/CyMagax6Ct</a> <a href="https://t.co/pnts4zav2r">pic.twitter.com/pnts4zav2r</a></p>— Charles Schwab Corp (@CharlesSchwab) <a href="https://twitter.com/CharlesSchwab/status/1713891246274433187?ref_src=twsrc%5Etfw">October 16, 2023</a></blockquote><p>For the third quarter, Charles Schwab reported net revenue of $4.6 billion, reflecting a decrease of 16% compared to the same period last year. This figure slightly missed analysts'
average estimate of $4.63 billion, according to LSEG data, Reuters reported. Net
interest revenue deflated 24% year-over-year to $2.2 billion, impacted by
client allocation decisions within a higher-interest-rate environment. </p><p>Rebounding with Impressive Quarterly
Earnings</p><p>Charles Schwab posted a profit of 77 cents per share
for the third quarter, excluding one-time costs. This exceeded analysts'
expectations, who had predicted 74 cents per share, according to LSEG data. </p><p>Comparatively, Schwab reported a substantial decline of 27%
in net income, amounting to $1.2 billion, <a href="https://www.financemagnates.com/institutional-forex/charles-schwabs-profit-decline-in-q2-amid-challenging-macroeconomic-environment/" target="_blank" rel="follow">in the second quarter</a>,
compared to the $1.8 billion reported in the same quarter of the previous year, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported.
</p><p>Revenue for the first half of the year also took a
hit, declining by 9% to $2.9 billion. Despite these challenges, Charles Schwab
welcomed 1 million new brokerage accounts during the period, attributed in part
to the growth in the asset management business.</p>

This article was written by Jared Kirui at www.financemagnates.com.