Schwab Reports Monthly Activity Highlights
Charles Schwab released its May 2024 Monthly Activity Report, showcasing core net new assets of $31.1 billion, marking its second-highest May ever. Total client assets reached $9.21 trillion, reflecting a 20% increase from May 2023 and a 4% rise from April 2024. The company reported 314,000 new brokerage accounts, which remained flat year-over-year but decreased by 13% from April 2024. Schwab expects a 1%-2% decrease in total revenue for Q2 2024 compared to Q1, with an adjusted pre-tax profit margin projected at approximately 40%. The anticipated non-GAAP adjustments for the quarter are estimated between $150 to $200 million.
- Core net new assets of $31.1 billion in May 2024, the second-highest May ever for Schwab.
- Total client assets reached $9.21 trillion, a 20% increase from May 2023 and a 4% rise from April 2024.
- New brokerage accounts were 314,000 in May, flat year-over-year and down 13% compared to April 2024.
- Expected Q2 2024 total revenue decrease of 1%-2% compared to Q1 2024.
- Anticipated non-GAAP adjustments for Q2 2024 range between $150 to $200 million.
Insights
Charles Schwab's report showcases several key metrics significant for investors. The firm reported
Importantly, Schwab anticipates a
Risks and Considerations: While the growth in client assets is commendable, the slowdown in new brokerage accounts and the expected decrease in revenue warrant attention. It would be wise to keep an eye on the company’s future strategies to boost new account openings and manage revenue fluctuations.
The report underscores the market position of Charles Schwab, emphasizing its ability to grow even amid varying market conditions. The increase in total client assets to
The anticipated
Investor Insight: From a market perspective, Schwab's robust client engagement is a positive sign. However, the company needs to address the stagnation in new account growth to ensure sustainable long-term expansion. Monitoring how Schwab adapts its strategies to attract new clients will be important for investors.
-
Core net new assets brought to the company by new and existing clients totaled
$31.1 billion -
Total client assets were
$9.21 trillion 20% from May 2023 and up4% compared to April 2024. -
New brokerage accounts were 314,000 in May, flat year-over-year and down
13% compared to April 2024. -
Consistent with the commentary at the Institutional Investor Day on May 22, the company currently expects second quarter total revenue to decrease by
1% –2% relative to the prior quarter and an adjusted(1) pre-tax profit margin of approximately40% . These results reflect the anticipated impact of tax season on transactional sweep cash as well as expected trading volumes during the period.
(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 |
Forward-Looking Statements
This press release contains forward-looking statements relating to second quarter transactional sweep cash, trading volumes, revenue, adjusted 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 35.5 million active brokerage accounts, 5.3 million workplace plan participant accounts, 1.9 million banking accounts, and
| The Charles Schwab Corporation Monthly Activity Report For May 2024 | |||||||||||||||||||||||||||||||||||||||||||||
2023 |
|
2024 |
|
Change | |||||||||||||||||||||||||||||||||||||||||
| May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | May | Mo. | Yr. | |||||||||||||||||||||||||||||||
| Market Indices (at month end) | |||||||||||||||||||||||||||||||||||||||||||||
| Dow Jones Industrial Average® | 32,908 |
|
34,408 |
|
35,560 |
|
34,722 |
|
33,508 |
|
33,053 |
|
35,951 |
|
37,690 |
|
38,150 |
|
38,996 |
|
39,807 |
|
37,816 |
|
38,686 |
|
|
|
|||||||||||||||||
| Nasdaq Composite® | 12,935 |
|
13,788 |
|
14,346 |
|
14,035 |
|
13,219 |
|
12,851 |
|
14,226 |
|
15,011 |
|
15,164 |
|
16,092 |
|
16,379 |
|
15,658 |
|
16,735 |
|
|
|
|||||||||||||||||
| Standard & Poor’s® 500 | 4,180 |
|
4,450 |
|
4,589 |
|
4,508 |
|
4,288 |
|
4,194 |
|
4,568 |
|
4,770 |
|
4,846 |
|
5,096 |
|
5,254 |
|
5,036 |
|
5,278 |
|
|
|
|||||||||||||||||
| Client Assets (in billions of dollars) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Beginning Client Assets | 7,631.5 |
|
7,650.2 |
|
8,015.8 |
|
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 |
|
|
|
|||||||||||||||||
| Net New Assets (1) | 24.6 |
|
33.8 |
|
12.9 |
|
8.1 |
|
27.2 |
|
5.0 |
|
19.2 |
|
42.1 |
|
14.8 |
|
31.7 |
|
41.7 |
|
10.0 |
|
31.0 |
|
N/M |
|
|||||||||||||||||
| Net Market (Losses) Gains | (5.9 |
) |
331.8 |
|
212.3 |
|
(154.4 |
) |
(297.4 |
) |
(176.1 |
) |
508.0 |
|
293.9 |
|
26.7 |
|
289.7 |
|
197.2 |
|
(280.9 |
) |
327.8 |
|
|
|
|||||||||||||||||
| Total Client Assets (at month end) | 7,650.2 |
|
8,015.8 |
|
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 |
|
|
|
|||||||||||||||||
| Core Net New Assets (1,2) | 20.7 |
|
33.8 |
|
13.7 |
|
4.9 |
|
27.1 |
|
11.3 |
|
21.7 |
|
43.1 |
|
17.2 |
|
33.4 |
|
45.0 |
|
1.0 |
|
31.1 |
|
N/M |
|
|||||||||||||||||
| Receiving Ongoing Advisory Services (at month end) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Investor Services | 526.3 |
|
547.5 |
|
560.6 |
|
552.2 |
|
533.0 |
|
522.2 |
|
557.0 |
|
581.4 |
|
584.1 |
|
601.8 |
|
618.5 |
|
602.2 |
|
624.0 |
|
|
|
|||||||||||||||||
| Advisor Services (3) | 3,377.8 |
|
3,527.8 |
|
3,619.8 |
|
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 |
|
|
|
|||||||||||||||||
| Client Accounts (at month end, in thousands) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Active Brokerage Accounts | 34,311 |
|
34,382 |
|
34,434 |
|
34,440 |
|
34,540 |
|
34,571 |
|
34,672 |
|
34,838 |
|
35,017 |
|
35,127 |
|
35,301 |
|
35,426 |
|
35,524 |
|
- |
|
|||||||||||||||||
| Banking Accounts | 1,768 |
|
1,781 |
|
1,792 |
|
1,798 |
|
1,799 |
|
1,812 |
|
1,825 |
|
1,838 |
|
1,856 |
|
1,871 |
|
1,885 |
|
1,901 |
|
1,916 |
|
|
|
|||||||||||||||||
| Workplace Plan Participant Accounts (4) | 4,962 |
|
5,003 |
|
5,030 |
|
5,037 |
|
5,141 |
|
5,212 |
|
5,212 |
|
5,221 |
|
5,226 |
|
5,268 |
|
5,277 |
|
5,282 |
|
5,345 |
|
|
|
|||||||||||||||||
| Client Activity |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| New Brokerage Accounts (in thousands) | 314 |
|
315 |
|
303 |
|
311 |
|
280 |
|
284 |
|
286 |
|
340 |
|
366 |
|
345 |
|
383 |
|
361 |
|
314 |
|
( |
- |
|||||||||||||||||
| Client Cash as a Percentage of Client Assets (5,6) | 10.9 |
% |
10.5 |
% |
10.2 |
% |
10.4 |
% |
10.8 |
% |
11.2 |
% |
10.7 |
% |
10.5 |
% |
10.5 |
% |
10.2 |
% |
10.0 |
% |
10.2 |
% |
9.9 |
% |
(30) bp |
(100) bp |
|||||||||||||||||
| Derivative Trades as a Percentage of Total Trades | 23.5 |
% |
23.9 |
% |
23.0 |
% |
24.4 |
% |
24.2 |
% |
23.2 |
% |
23.1 |
% |
21.8 |
% |
21.8 |
% |
22.2 |
% |
21.9 |
% |
22.1 |
% |
21.9 |
% |
(20) bp |
(160) bp |
|||||||||||||||||
| Selected Average Balances (in millions of dollars) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Average Interest-Earning Assets (7) | 483,438 |
|
479,752 |
|
466,659 |
|
449,483 |
|
444,864 |
|
438,522 |
|
439,118 |
|
446,305 |
|
443,694 |
|
434,822 |
|
431,456 |
|
423,532 |
|
415,950 |
|
( |
( |
|||||||||||||||||
| Average Margin Balances | 60,250 |
|
61,543 |
|
63,040 |
|
64,226 |
|
64,014 |
|
63,946 |
|
61,502 |
|
62,309 |
|
61,368 |
|
63,600 |
|
66,425 |
|
68,827 |
|
67,614 |
|
( |
|
|||||||||||||||||
| Average Bank Deposit Account Balances (8) | 103,149 |
|
102,917 |
|
102,566 |
|
101,928 |
|
100,404 |
|
97,893 |
|
94,991 |
|
95,518 |
|
95,553 |
|
92,075 |
|
90,774 |
|
88,819 |
|
86,844 |
|
( |
( |
|||||||||||||||||
| Mutual Fund and Exchange-Traded Fund |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Net Buys (Sells) (9,10) (in millions of dollars) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Equities | (1,366 |
) |
9,190 |
|
7,423 |
|
(278 |
) |
675 |
|
(3,039 |
) |
6,099 |
|
7,903 |
|
8,182 |
|
7,624 |
|
10,379 |
|
3,472 |
|
5,734 |
|
|
|
|||||||||||||||||
| Hybrid | (889 |
) |
(903 |
) |
(407 |
) |
(1,037 |
) |
(828 |
) |
(1,457 |
) |
(1,466 |
) |
(1,596 |
) |
(501 |
) |
(1,330 |
) |
(439 |
) |
(703 |
) |
(558 |
) |
|
|
|||||||||||||||||
| Bonds | 2,029 |
|
3,302 |
|
2,515 |
|
4,696 |
|
2,723 |
|
1,094 |
|
255 |
|
6,104 |
|
7,510 |
|
9,883 |
|
7,561 |
|
5,949 |
|
5,854 |
|
|
|
|||||||||||||||||
| Net Buy (Sell) Activity (in millions of dollars) |
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Mutual Funds (9) | (7,157 |
) |
(4,485 |
) |
(3,333 |
) |
(6,476 |
) |
(5,853 |
) |
(12,245 |
) |
(9,267 |
) |
(7,406 |
) |
(966 |
) |
(1,348 |
) |
(1,607 |
) |
(4,818 |
) |
(5,544 |
) |
|
|
|||||||||||||||||
| Exchange-Traded Funds (10) | 6,931 |
|
16,074 |
|
12,864 |
|
9,857 |
|
8,423 |
|
8,843 |
|
14,155 |
|
19,817 |
|
16,157 |
|
17,525 |
|
19,108 |
|
13,536 |
|
16,574 |
|
|
|
|||||||||||||||||
| Money Market Funds | 15,256 |
|
9,112 |
|
7,911 |
|
16,869 |
|
13,388 |
|
16,976 |
|
11,670 |
|
7,745 |
|
11,717 |
|
10,129 |
|
9,085 |
|
(2,357 |
) |
9,790 |
|
|
|
|||||||||||||||||
| 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. Additionally, 2024 includes an inflow of |
|
(2) |
Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than |
|
(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. | |
(6) |
Beginning July 2023, client cash as a percentage of client assets excludes brokered CDs issued by Charles Schwab Bank. Prior periods have been recast to reflect this change. | |
(7) |
Represents average total interest-earning assets on the Company's balance sheet. | |
(8) |
Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions. | |
(9) |
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. | |
(10) |
Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs. | |
| N/M - Not meaningful. Percentage changes greater than |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240614224954/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 May 2024?
How much did Charles Schwab's total client assets increase in May 2024?
How many new brokerage accounts did Schwab open in May 2024?
What is the expected revenue change for Schwab in Q2 2024?
What is Schwab's projected adjusted pre-tax profit margin for Q2 2024?
