Schwab Monthly Metrics: Interest Earnings Continues Sustained Growth Momentum; Trading Activity Declines
Charles Schwab (NYSE:SCHW) reported significant growth across its key monthly metrics in October. Interest earning assets, which contributes around 45% of the overall revenues for the company, have continued to grow at a fast rate over the year (~ 20% year to date), likely spurred in part by the rate hike last December. The Fed’s guidance on a possible hike in the near term is likely to propel earnings from this segment.
There has been increased demand among customers for expert advice on asset management to reach financial goals. The company’s continued efforts are providing actionable insights and capitalizing on the company’s digital advisory strengths. This has propelled growth in assets under management. The company’s focus on innovating customer-centric financial products and perosnal guidance to customers is likely to increase the revenue from this segment.
Trading volumes have continued to decline in the second half of the year. Amid tough competition from competing full-service and discount brokerages, we expect trading volumes to remain largely neutral. However, increased volatility due to the recent U.S. elections and improvement in the U.S. economy might cause a rise on the overall trading volumes and slightly benefit the company’s trading volumes.
See our complete analysis for Charles Schwab.
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