Charles Schwab reports Q2 EPS 39c, consensus 39c
Reports Q2 revenue $2.13B, consensus $2.12B. CEO Walt Bettinger said, "Strong client engagement and demand for our contemporary approach to wealth management have led to business momentum that ranks among the most powerful in Schwab's history. Equity markets touched all-time highs during the second quarter, volatility remained largely contained, short-term interest rates rose further, and clients benefited from the full extent of the strategic pricing moves we announced in February. Against this backdrop, clients opened more than 350,000 new brokerage accounts during the second quarter, bringing year-to-date new accounts to 719,000 - up 34% from a year ago and our strongest first half total in seventeen years. In addition, households new to Schwab as part of our Retail business rose by 50% versus the first half of 2016. We gathered $46.2 billion of core net new assets during the second quarter, a record for the period and the second-highest quarter ever. Our year-to-date core net new assets of $85.1 billion represent the strongest first half in the company's history and a 6% organic growth rate. Retail gathered record levels of core net new assets in the first six months of 2017, posting a 69% increase over the year-earlier period. Concurrently, Advisor Services attracted near-record core inflows and achieved a 77% year-over-year increase. Our impressive results were helped by an 86% year-over-year lift in net transfers of client assets from our competitors for the first half of 2017, demonstrating our ability to win in the marketplace. Total client assets reached a record $3.04 trillion at month-end June, up 16% year-over-year. We ended June serving 10.5 million active brokerage accounts, 1.1 million banking accounts, and 1.5 million retirement plan participants." Schwab also said, " With sweep balances impacted by minimal year-to-date bulk transfers and reduced client cash levels, our consolidated assets totaled $221 billion as of June 30th. This contributed to a preliminary 7.4% Tier 1 Leverage ratio at quarter-end, somewhat above our long-term operating objective of 6.75-7%. We delivered a 15% return on equity for the second quarter, capping our strongest first half ROE in 8 years."