July 18, 2011 / 1:03 PM / 7 years ago

Schwab net rises, boosted by fees, interest revenue

TORONTO (Reuters) - Charles Schwab Corp (SCHW.N) said quarterly earnings rose 16 percent as asset management fees and interest revenue offset a slowdown in client trading.

Net income was $238 million, or 20 cents a share, in the second quarter, compared with $205 million, or 17 cents a share, a year earlier.

Analysts had expected 19 cents a share, according to Thomson Reuters I/B/E/S.

Revenue at San Francisco-based Schwab rose 10 percent to $1.19 billion, meeting analysts’ average forecast.

“Although the economic recovery is progressing slower than hoped, clients remain solidly engaged with their investments, as cash holdings at Schwab have declined to pre-crisis levels,” Chief Executive Walt Bettinger said in a statement.

Client assets enrolled in Schwab retail advisory offerings were up 20 percent to $113 billion, while total advised assets rose 17 percent to $811 billion.

Daily average trades, a widely watched measure of client activity, were down 9 percent from a year earlier and down 16 percent from the first quarter this year, to 397,100.

Investors pay close attention to “retail” trading activity as reported by the online brokers because it serves as a barometer for market sentiment. If small investors are making trades and putting money into stock funds, the theory goes, market valuations will rise.

Investors have been shaken by the earthquake and tsunami in Japan, sovereign debt problems in Europe and a sputtering U.S. economic recovery.

Schwab said average revenue per trade rose 1 percent to $12.23 in the second quarter.

It said it had net new assets of $15.4 billion, up 10 percent from a year earlier when the firm recorded a large clearing outflow.

Net new accounts for the quarter fell 10 percent to around 36,000. Total accounts were up 4 percent year-over-year, to 5.7 million.

Reporting by John McCrank; editing by John Wallace

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