Charles Schwab Q4 2020 earnings

A pedestrian passes in front of a Charles Schwab Corp. bank branch in the city of Chicago, Illinois.

Christopher Dilts | Bloomberg Getty Images

Retail Investment beat Shemboth Charles Schwab’s Wall Street profit and revenue expectations for the fourth quarter, the first earnings report since Schwab’s $ 26 billion acquisition of rival TD Ameritrade.

According to refinitiv, Charles Schwab recorded adjusted earnings of 74 cents per share on Tuesday, with estimates of 71 cents per share. Revenue came in at $ 4.18 billion, exceeding the forecast by $ 4.01 billion.

Schwab said it now operates about 29.6 million brokerage accounts.

Schwab Rose’s shares were flat after rising slightly after the opening bell on Tuesday.

Total customer assets for Schwab totaled a record $ 6.69 trillion at the end of 2020, a 66% increase year-over-year, linked to TD Amritrade assets.

Schwab added 15.77 million new customers in the fourth quarter, including 14.5 million new brokerage accounts from the TD Ameritrade merger.

Schwab CEO Walt Bettinger told clients, “Producing record operating performance and closing the largest brokerage acquisition in history during the fourth quarter of 2020 was an extraordinary capstone.”

Daily average trade increased to 5.8 million in the fourth quarter, the highest on record. Schwab’s customers hit a peak of 7.8 million trades on 9 November.

In addition to record client trading activity, and TD Ameritrade, trading revenue increased from $ 88 billion to $ 1.4 billion. This came despite the full-year impact of commission-free trade, which was implemented in late 2019.

Schwab and other leading brokers are coming off a record year for retail investment in 2020. Unprecedented market volatility and the Kovid-19 lockdown created a unique opportunity for regular investors to have a surprising but epic return to the stock.

“Against this backdrop, customer engagement with financial markets soared to record levels – combined new-to-firm homes grew by more than 175% compared to 2019, with the number of households holding more than 50% of trades Is over 50% –year, ”added Bettinger.

Schwab’s shares have risen nearly 60% since their last earnings report in October 2020. In addition to the boom in retail investment and the TD Ameritrade acquisition, Schwab is being boosted by interest rate hikes.

Schwab’s stock remains highly correlated with a 10-year yield on the US-year as the broker stops circulating customer cash held in each account.

Schwab’s fourth-quarter results adjusted e-brokers for the full year to 2020, raising earnings to $ 2.45 per share and revenue to $ 11.7 billion.

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