Charles Schwab says it continued adding client assets and new accounts during the second quarter, but its income was down by almost a third year-over-year.
The firm brought in $137.4 billion in net new assets in the second quarter, according to Schwab’s latest quarterly earnings report. It also ended June with 14.1 million total active brokerage accounts, an 18% increase year-over-year, the company says.
Those numbers were helped by the addition of 1.1 million United Services Automobile Association member accounts, which pushed the number of new brokerage accounts for the quarter to 1.7 million, sharply higher than 609,000 in the first quarter, according to the report.
The $1.8 billion USAA deal, announced in July 2019, closed in May this year, according to the company. As a result, total client assets reached a record $4.11 trillion by the end of June, an 18% increase over the first quarter of 2020 and an 11% increase year over year, Schwab says.
However, net revenues in the second quarter of 2020 were $2.45 billion, which was 6% lower than in the prior quarter and 9% lower than in the second quarter of 2019, according to the report. Trading revenue, substantially dampened in the first three months of 2020 in the wake of Schwab leading the charge into zero trading commissions in October, rose 3% in the second quarter, to $193 million, the company says. But that was still 7% lower than in the second quarter of 2019, according to the report.
Meanwhile, expenses, excluding interest, stayed relatively flat at $1.56 billion, Schwab says.
As a result, net income in the second quarter plunged to $671 million, which was 16% lower than the $795 million earned in the prior quarter and 28% lower than the $937 million reported in the second quarter of 2019, according to the report.
Schwab CEO Walt Bettinger says in a statement that the ongoing Covid-19 pandemic has presented major challenges for the firm, and that close to 95% of its workers are still working remotely.
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