Shares of The Charles Schwab Corporation SCHW fell over 2% after the company released its monthly activity report for Feb 2015. The company recorded net new assets (bought by existing as well as new clients) of $12.3 billion, reflecting a rise of 13% from the prior-year month and 32% from the preceding month.
However, after considering the impact of certain substantial non-recurring flows, net new assets came in at $6.8 billion. The adjusted figure reflected a 38% decline from the prior-year month and 27% from the previous month, resulting in slightly shaken investor confidence.
Further, total client assets summed $2.53 trillion, up 10% from Feb 2014 and 4% from Jan 2015. As of month-end Feb 2015, average interest-earning assets amounted to $148.9 billion, up 9% from Feb 2014 and 1% from Jan 2015.
The client assets, receiving ongoing advisory services, totaled $1.25 trillion for the month, up 11% from the prior-year month and 3% from the previous month.
Schwab opened 80,000 new brokerage accounts, up 3% from Feb 2014 but down 5% from Jan 2015. The company’s active brokerage accounts amounted to 9.4 million, up 3% year over year but almost in line with the previous month.
Clients’ banking accounts totaled 983,000, growing 6% year over year and 1% from the prior-month level. Moreover, Schwab reported 1.48 million corporate retirement plan participants for Feb 2015, up 11% year over year and 2% from the prior month.
Net buy activity in the Mutual Fund for Feb 2015 was $3,086 million, down from $3,658 million recorded in the year-ago month and $3,174 million in the previous month. Net buy activity in the Exchange Traded Funds was reported at $3,290 million, improving 47% from the year-ago figure but decreasing 7% from the previous month figure.
Schwab is well positioned to benefit from the improving broader trends in the investment brokerage industry as well as from diversified revenue streams, enhanced equity markets and management’s efforts to boost client base in advisory solutions. Moreover, synergies from the acquisitions and a sturdy capital position are likely to lift the company’s financials going forward.
Nevertheless, despite several initiatives to reduce dependency on interest rates, Schwab’s financials will likely remain pressurized due to a persisting low interest rate environment. Currently, it carries a Zacks Rank #3 (Hold).
Among other investment brokers, TD Ameritrade Holding Corp.’s AMTD average client trades per day came in at 485,000, down 3% year over year and 2% from the preceding month.
For Interactive Brokers Group, Inc. IBKR, total customer Daily Average Revenue Trades (DARTs) totaled 633,000, up 9% from the year-ago month but down 6% from the prior month. Additionally, E*TRADE Financial Corporation’s ETFC DARTs summed 179,420, declining 11% from the prior-year month but up 4% from the previous month.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment