Charles Schwab (SCHW) said Tuesday that profits soared 32% from a year ago, fueled by record client trading activity during one of Wall Street's busiest quarters ever.
Schwab reported net income of $2.8 billion, or $1.62 per share on a adjusted basis. Total net revenue increased 21% to $7.1 billion, driven in part by a 28% rise in trading revenue.
The company's report exceeded analyst forecasts for profits and revenue.
"During the second quarter, strong client engagement helped drive year-over-year revenue growth," Schwab CEO Rick Wurster said in a earnings release statement.
Sharp price swings, heavy stock rotation, and rising investor balances helped stock trading desks deliver a blowout second quarter. The frenzy extended to Schwab.
Customer margin balances, or the amount clients borrowed from Schwab to buy securities, rose 30% from the previous quarter to $165 billion. The platform's daily average number of trades climbed to a record 11.9 million.
"Our ability to do more for clients throughout their financial lives enables Schwab to deliver robust results across a range of environments," Wurster added.
Schwab's core profit machine, net interest income, rose 19% from a year ago to $3.36 billion. Its net interest margin — or the spread Schwab earns on its loans and securities after funding costs — expanded by 12 basis points from the previous quarter to 3.00%.
Total client assets on the firm's platform increased by $1.31 trillion from last quarter to $13.08 trillion.
Schwab shares fell in early morning trading. Schwab's stock hit its a low point in late May but has since recovered to roughly where they began the year.
David Hollerith covers a range of developments throughout the financial sector, from Wall Street to banking and asset management to crypto and fintech. Email him at david.hollerith@yahoofinance.com. Follow him on X at @DsHollers.
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