Charles Schwab Delivers Strong Q4: Higher Trading Volumes And New Assets Drive Growth

The Charles Schwab Corporation SCHW shares are trading higher after the company reported fourth-quarter results.

Revenue rose 20% year over year to $5.33 billion, beating the consensus of $5.19 billion.

Net interest revenue rose 19% Y/Y to $2.531 billion in the fourth quarter. Clients’ daily average trades totaled 6.312 million, up 22% Y/Y.

Asset management and administration fees rose 22% Y/Y to $1.51 billion, and trading revenue surged 14%, led by higher volumes and changes in the trading mix.

Adjusted net income rose 44% Y/Y to $1.97 billion. Adjusted EPS increased 49% to $1.01, beating the consensus of $0.91.

The bank had $259.1 billion in deposits at the end of the fourth quarter of 2024, down 11% Y/Y.

In the fourth quarter of FY24, core net new assets stood at $114.8 billion, pushing total client assets to $366.9 billion in 2024 (up 20% Y/Y), reflecting ongoing progress following the Ameritrade integration.

Total client assets rose 19% Y/Y to $10.10 trillion. The company’s active brokerage accounts reached 36.5 million in the quarter.

Mike Verdeschi, CFO, said, “Client transactional sweep cash grew by $35 billion versus 3Q24, including a $25 billion increase in December due to typical year-end seasonality. This build helped us further reduce Bank Supplemental Funding by $14.9 billion to $49.9 billion – down ~50% from peak levels.”

Goldman Sachs analyst Alexander Blostein writes that the company delivered strong fourth-quarter results, with improved deposits, reduced supplemental borrowings, solid NNA growth, controlled expenses, and capital rebuilding.

While year-end seasonality boosted cash and client activity, the analyst says that the company’s EPS growth trajectory remains intact for 2025, and the increased interest rate backdrop should support an upward bias to EPS estimates.

Investors can gain exposure to the stock via IShares U.S. Broker-Dealers & Securities Exchanges ETF IAI and Tidal ETF Trust God Bless America ETF YALL.

Price Action: SCHW shares are up 7.41% at $82.02 at the last check Tuesday.

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