Schwab Reports Monthly Activity Highlights

Rhea-AI Summary

The Charles Schwab Corporation's Monthly Activity Report for February 2022 reveals core net new assets totaling $40.6 billion, with total client assets reaching $7.69 trillion, up 11% year-over-year. However, this is a 2% decline from January 2022. Average margin balances increased by 22% year-over-year but decreased 3% from January. CFO Peter Crawford noted that market conditions, influenced by events in Ukraine, have lowered client assets and margin balances by 6% and 5% respectively since December. Revenue per trade has also declined by 5-10%.

Positive

• Core net new assets of $40.6 billion were generated.
• Total client assets reached $7.69 trillion, an 11% increase year-over-year.
• Average margin balances were up 22% compared to February 2021.

Negative

• Total client assets decreased by 2% compared to January 2022.
• Average margin balances decreased by 3% from January 2022.
• Client assets and margin balances down 6% and 5% respectively since December.
• Revenue per trade running 5-10% below prior quarter average.
• Softer demand impacted securities lending revenue by over 15%.

WESTLAKE, Texas--(BUSINESS WIRE)-- The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of February 2022 include:

• Core net new assets brought to the company by new and existing clients totaled $40.6 billion. Net new assets excluding mutual fund clearing totaled $41.6 billion.
• Total client assets were $7.69 trillion as of month-end February, up 11% from February 2021 and down 2% compared to January 2022.
• Average margin balances were $84.4 billion in February, up 22% from February 2021 and down 3% compared to January 2022.

CFO Peter Crawford commented, “Thus far in 2022, client engagement remains strong, as evidenced by $74.2 billion in core net new assets and 6.6 million daily average trades during the first two months of the year. At the same time, current market conditions stemming from the tragedy unfolding in Ukraine have pushed major U.S. equity indices into correction territory. This pronounced pullback has weighed on client asset levels and margin balances, which are down 6% and 5%, respectively, since month-end December. Additionally, on a quarter-to-date basis, shifts in the mix of client trading activity have resulted in revenue per trade running approximately 5-10% below the prior quarter average, and softer demand from borrowers across the industry has impacted our securities lending revenue by more than 15%. Overall we believe our all-weather model remains firmly intact through these turbulent times and helps keep us positioned to benefit from improvements in the macroeconomic environment.”

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 33.4 million active brokerage accounts, 2.2 million corporate retirement plan participants, 1.6 million banking accounts, and $7.69 trillion in client assets as of February 28, 2022. 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 subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their 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.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

The Charles Schwab Corporation Monthly Activity Report For February 2022
			2021																																	2022						Change
			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov			Dec			Jan			Feb			Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average			30,932			32,982			33,875			34,529			34,503			34,935			35,361			33,844			35,820			34,484			36,338			35,132			33,893			(4	%)	10	%
Nasdaq Composite			13,192			13,247			13,963			13,749			14,504			14,673			15,259			14,449			15,498			15,538			15,645			14,240			13,751			(3	%)	4	%
Standard & Poor’s® 500			3,811			3,973			4,181			4,204			4,298			4,395			4,523			4,308			4,605			4,567			4,766			4,516			4,374			(3	%)	15	%
Client Assets (in billions of dollars)
Beginning Client Assets			6,759.6			6,900.5			7,069.1			7,336.1			7,395.7			7,574.8			7,642.7			7,838.2			7,614.0			7,982.3			7,918.3			8,138.0			7,803.8
Net New Assets (1)			37.0			62.6			37.2			28.1			43.5			44.3			51.8			42.9			22.9			31.4			80.3			33.6			40.6			21	%	10	%
Net Market Gains (Losses)			103.9			106.0			229.8			31.5			135.6			23.6			143.7			(267.1	)		345.4			(95.4	)		139.4			(367.8	)		(157.8	)
Total Client Assets (at month end)			6,900.5			7,069.1			7,336.1			7,395.7			7,574.8			7,642.7			7,838.2			7,614.0			7,982.3			7,918.3			8,138.0			7,803.8			7,686.6			(2	%)	11	%
Core Net New Assets (2)			51.4			62.6			37.2			28.1			43.5			44.3			51.8			42.9			36.8			45.1			80.3			33.6			40.6			21	%	(21	%)
Receiving Ongoing Advisory Services (at month end)
Investor Services			481.3			495.2			511.1			517.8			525.1			531.9			542.5			530.1			548.3			543.1			559.2			541.9			533.7			(2	%)	11	%
Advisor Services (3)			2,913.3			2,997.9			3,112.5			3,150.4			3,209.3			3,256.5			3,333.4			3,253.2			3,399.8			3,374.3			3,505.2			3,382.4			3,342.5			(1	%)	15	%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts			31,523			31,902			31,877			32,110			32,265			32,386			32,513			32,675			32,796			32,942			33,165			33,308			33,421			-		6	%
Banking Accounts			1,542			1,608			1,562			1,584			1,574			1,578			1,594			1,580			1,593			1,608			1,614			1,628			1,641			1	%	6	%
Corporate Retirement Plan Participants			2,093			2,105			2,116			2,130			2,149			2,159			2,188			2,207			2,213			2,198			2,200			2,216			2,235			1	%	7	%
Client Activity
New Brokerage Accounts (in thousands)			1,211			847			609			549			499			402			402			374			397			448			473			426			356			(16	%)	(71	%)
Client Cash as a Percentage of Client Assets (4)			11.8	%		11.5	%		10.9	%		10.8	%		10.5	%		10.4	%		10.3	%		10.8	%		10.4	%		10.5	%		10.9	%		11.3	%		11.5	%		20 bp		(30) bp
Derivative Trades as a Percentage of Total Trades			16.6	%		18.5	%		20.4	%		20.9	%		20.6	%		22.2	%		23.1	%		23.1	%		22.5	%		23.4	%		23.0	%		22.4	%		24.0	%		160 bp		740 bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (5)			514,885			520,074			527,194			528,642			536,146			546,579			552,372			565,379			574,181			584,362			605,709			622,997			629,042			1	%	22	%
Average Margin Balances			69,064			71,266			72,863			75,921			78,410			79,910			81,021			81,705			83,835			87,311			88,328			86,737			84,354			(3	%)	22	%
Average Bank Deposit Account Balances (6)			167,433			164,866			162,392			160,459			161,377			151,275			150,896			152,330			154,040			153,877			154,918			157,706			153,824			(2	%)	(8	%)
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (7,8) (in millions of dollars)
Equities			14,246			16,301			13,422			9,854			10,873			7,418			8,808			7,596			8,840			13,099			11,519			7,384			9,371
Hybrid			832			1,133			877			1			390			666			569			335			81			308			(1,207	)		(367	)		(478	)
Bonds			9,334			8,237			8,940			5,906			10,101			6,917			8,044			6,232			4,425			4,097			5,600			1,804			(1,973	)
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (7)			6,273			6,190			5,754			2,022			5,872			2,644			3,876			(308	)		302			189			(2,859	)		(4,961	)		(6,318	)
Exchange-Traded Funds (8)			18,139			19,481			17,485			13,739			15,492			12,357			13,545			14,471			13,044			17,315			18,771			13,782			13,238
Money Market Funds			(4,405	)		(4,528	)		(5,153	)		(3,988	)		(3,806	)		(2,501	)		(1,372	)		(1,512	)		(451	)		(1,725	)		(144	)		(1,984	)		(1,086	)

		Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.
(1)		November 2021 includes an outflow of $13.7 billion from a mutual fund clearing services client. October 2021 includes an outflow of $13.9 billion from a mutual fund clearing services client. February 2021 includes an outflow of $14.4 billion from a mutual fund clearing services client.
(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. These flows may span multiple reporting periods.
(3)		Excludes Retirement Business Services.
(4)		Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets.
(5)		Represents average total interest-earning assets on the company's balance sheet.
(6)		Represents average TD Ameritrade clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(7)		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.
(8)		Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220314005185/en/

MEDIA:

Mayura Hooper

Charles Schwab

Phone: 415-667-1525

INVESTORS/ANALYSTS:

Jeff Edwards

Charles Schwab

Phone: 415-667-1524

 

Source: The Charles Schwab Corporation

FAQ

What were Charles Schwab's core net new assets in February 2022?

Charles Schwab reported core net new assets of $40.6 billion in February 2022.

How much were total client assets for Charles Schwab as of February 2022?

Total client assets for Charles Schwab reached $7.69 trillion as of February 2022.

What percentage increase did Charles Schwab see in average margin balances year-over-year in February 2022?

Average margin balances increased by 22% year-over-year in February 2022.

What decline did Charles Schwab experience in client assets and margin balances since December 2021?

Client assets and margin balances decreased by 6% and 5% respectively since December 2021.

How did revenue per trade change for Charles Schwab in February 2022?

Revenue per trade was approximately 5-10% below the prior quarter average.