Schwab (SCHW) January Client Assets Up Y/Y on Market Volatility

Charles Schwab SCHW released its activity report for January 2022. Total client assets were $7.80 trillion, down 4% from December 2021 but up 15% from January 2021. The year-over-year improvement was mainly driven by extreme market volatility.

Client assets receiving ongoing advisory services were $3.9243 trillion, down 3% from the prior month but up 18% year over year. Schwab’s core net new assets were $33.6 billion in the reported month. This reflected a plunge of 58% from the previous month and 2% year over year.

Schwab’s average interest-earning assets of $623 billion rose 3% from December 2021 and 20% year over year. Average margin balances were $86.7 billion, falling 2% from the previous month but surging 38% on a year-over-year basis. Average bank deposit account balances totaled $157.7 billion, up 2% from the previous month but down 6% from January 2021.

Schwab opened 426,000 new brokerage accounts in January 2022, declining 10% sequentially and 61% from the year-earlier month.

Schwab’s active brokerage accounts totaled 33.3 million at the end of January 2022, in line on a sequential basis and up 9% from the year-ago month. Clients’ banking accounts were 1.6 million, up 1% sequentially and 7% from January 2021. Likewise, the number of corporate retirement plan participants was up 1% from the prior-month level and 7% year over year to 2.2 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.

Over the past year, shares of Schwab have jumped 50.8%, outperforming 20.2% rise of the industry.
 

Image Source: Zacks Investment Research

Currently, Schwab carries a Zacks Rank #2 (Buy). 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 have come out with monthly data are Interactive Brokers Group IBKR and Tradeweb Markets Inc. TW.

Interactive Brokers’ Electronic Brokerage segment announced performance metrics for January 2022. The segment (that deals with the clearance and settlement of trades for individual and institutional clients globally) reported a surge in client Daily Average Revenue Trades (DARTs) both on a sequential basis, while the same declined on a year-over-year basis.

IBKR’s total client DARTs were 2,621,000, which grew 18% from December 2021 but declined 20% from January 2021.

Tradeweb Markets reported total trading volume of $22.3 trillion in January 2022. Average daily volumes (ADV) were $1.12 trillion, up 7.6% year over year.

In the reported month, fully electronic share for U.S High Yield TRACE set a Tradeweb record of 8.2%. Also, TW set a new ADV record in European government bond trading.

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