By Dave Sebastian
Charles Schwab Corp. said its profit for the second quarter fell as net interest revenue declined due to the Federal Reserve's monetary easing in March and compression in asset returns.
The company posted net income of $671 million, or 48 cents a share, compared with $937 million, or 66 cents a share, in the year-ago period. Adjusted earnings were 54 cents a share.
Analysts polled by FactSet were expecting earnings of 53 cents a share, or 54 cents on an adjusted basis. The company said the quarter's results include certain acquisition and integration-related costs.
Revenue was $2.45 billion, down 8.6% from the year-ago period. Analysts were expecting $2.48 billion.
Net interest revenue fell to $1.39 billion from $1.61 billion.
"During the second quarter, we remained intent on maintaining an all-weather balance sheet with healthy liquidity and capital levels," Finance Chief Peter Crawford said. "The sharp pandemic-driven increase in client sweep deposits during the first quarter was followed by more modest balance sheet expansion over the past three months."
Expenses, not including interest, rose 8.1% to $1.56 billion.
Total client assets rose 11% to $4.11 trillion as of June 30, driven by renewed strength in equity valuations, Chief Executive Walt Bettinger said.
The company last month said the U.S. Justice Department's antitrust division closed its investigation of Schwab's proposed acquisition of TD Ameritrade Holding Corp., clearing the path for the $26 billion combination that would cement Schwab's role as a dominant player in the discount-brokerage market.
Write to Dave Sebastian at email@example.com