The Charles Schwab Corporation (NYSE: SCHW), a leading financial services provider, announced its second quarter earnings on Monday, with revenues beating estimates and earnings per share meeting expectations.
According to the report, net income for the second quarter increased 28% from $353 million in the same period of 2015, reaching $452 million, which was also up 10% from $412 million in the first quarter. Revenues was up 17% year-over-year to $1.83 billion from $1.57 billion, beating Wall Street estimates. The company said that the increasing number of clients helps accelerate profits and revenues.
In addition, the net interest revenue increased 30% to $798 million. The total non-interest expense increased 11% year-over-year and reached $1.11 billion. Provision for loan losses didn’t change much compared with the same period of last year, reaching $2 million. Fee waivers dropped 67% year-over-year, reaching $55 million, and pre-tax profit margin increased to 39.4% in the second quarter of 2016. The asset management and administration fee also increased 8.3%, reaching $757 million.
The company said that the active brokerage accounts also increased compared to last year. The number of Charles Schwab’s active brokerage accounts increased to 10 million from 9.6 million in 2015. Clients opened 271,000 brokerage accounts in the second quarter of 2016, which were less than the 280,000 accounts in the same period last year.
“We delivered record financial results in the second quarter based on sustained success in growing our client base, as well as the effects of the Federal Reserve’s initial rate increase in December and the relative stability of other environmental drivers until late in the period,” Joe Martinetto, the CFO of the company said. “Our year-to-date results have outperformed the baseline scenario that we laid out in the beginning of 2016. But as the second quarter came to a close, market concerns regarding economic growth, interest rates and equity valuations in the second half of this year escalated significantly. While many of these concerns have abated somewhat, we recognize the importance of remaining flexible in order to make the most of the environment as it evolves.”