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Schwab (SCHW) Up 1.2% as Total Client Assets Rise in July

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Shares of Charles Schwab (SCHW - Free Report) gained 1.2% since the release of its monthly activity report for July 2022 last week. Total client assets were $7.3 trillion, up 7% from June 2022 and down 4% from July 2021.

Further, core net new assets were $31.5 billion in the reported month. This compared with net new assets of $40.6 billion in June 2022 and $44.3 billion in July 2021. Client assets receiving ongoing advisory services were $3.74 trillion, up 6% from the prior month but down 1% year over year.  

Schwab’s average interest-earning assets of $605.6 billion declined 1% from June 2022 but were up 11% year over year. Average margin balances were $72.2 billion, decreasing 6% from the previous month and 10% on a year-over-year basis. Average bank deposit account balances totaled $154.5 billion, relatively stable sequentially and rising 2% from July 2021.

Schwab opened 278,000 new brokerage accounts in July 2022, declining 9% sequentially and 31% from the year-earlier month.

Schwab’s active brokerage accounts totaled 33.9 million at the end of July 2022, stable on a sequential basis and up 5% from the year-ago month. Clients’ banking accounts were 1.68 million, up 1% sequentially and 6% from July 2021. The number of corporate retirement plan participants was on par with the prior-month level and up 5% year over year to 2.27 million.

Schwab’s inorganic growth efforts have reinforced its position as a leading brokerage player and are expected to be accretive to earnings. By offering commission-free trading, the company has witnessed a rise in client assets and brokerage accounts, which, in turn, is improving its market share.

So far this year, shares of Schwab have lost 9.8% compared with a 9.4% fall of the industry.

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Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competitive Landscape

A couple of other brokerage firms that come out with monthly data are Interactive Brokers Group (IBKR - Free Report) and LPL Financial Holdings Inc. (LPLA - Free Report) .

Interactive Brokers’ Electronic Brokerage segment announced performance metrics for July 2022. The segment (dealing with the clearance and settlement of trades for individual and institutional clients globally) reported a decline in client Daily Average Revenue Trades (DARTs) both on a sequential and a year-over-year basis.

Total client DARTs for the month were 1,823,000, down 10% from the June 2022 level and 23% year over year. On an annualized basis, IBKR recorded Cleared Average DARTs per customer account of 210. The metric decreased 11% sequentially and 44% from the prior-year period.

LPL Financial is likely to come out with its monthly activity report in the coming days.


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