SCHW Charles Schwab Corporation

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

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• Core net new assets brought to the company by new and existing clients totaled $31.1 billion – representing our second highest May ever.
• Total client assets were $9.21 trillion as of month-end May, up 20% from May 2023 and up 4% 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 approximately 40%. 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 $150 to $200 million during 2024.

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 $9.21 trillion in client assets as of May 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 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

 

2%

18%

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

 

7%

29%

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

 

5%

26%

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

26%

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

 

4%

20%

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

50%

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

 

4%

19%

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

 

3%

19%

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

 

-

4%

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

 

1%

8%

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

 

1%

8%

Client Activity

 

 

New Brokerage Accounts (in thousands)

314

 

315

 

303

 

311

 

280

 

284

 

286

 

340

 

366

 

345

 

383

 

361

 

314

 

(13%)

-

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

 

(2%)

(14%)

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

 

(2%)

12%

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

 

(2%)

(16%)

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 $10.3 billion from a mutual fund clearing services client in April, and 2023 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.

(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 200% are presented as not meaningful.

 

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