Schwab Reports Growing Client Base and Solid Activity Levels

Monthly Activity Report Reflects Underlying Strength of Business Model and Client Engagement

Friday, March 13, 2009 5:45 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NASDAQ:
SCHW

SAN FRANCISCO--(BUSINESS WIRE)--The Charles Schwab Corporation released its Monthly Market Activity Report today. Company highlights for the month of February 2009 include:

  • Net new assets brought to the company by new and existing clients in February 2009 totaled $5.5 billion.
  • Total client assets were $1.049 trillion as of month-end February, down 25% from February 2008 and down 5% from January 2009.
  • Client daily average trades were 349.9 thousand in February 2009, up 21% from February 2008 and up 7% from January 2009.

CFO Joe Martinetto commented, “During the first two months of 2009, net new client assets brought to Schwab totaled $18 billion, clients opened 124 thousand new brokerage accounts, retirement plan participants served by the company increased by 127 thousand, and bank accounts rose by 28 thousand – all signs that investors value our sustained focus on meeting their needs regardless of the environment.”

Mr. Martinetto added, “While our business momentum remains strong, we recognize that the securities markets have yet to show signs of recovery, and we have proceeded with our previously announced plan of identifying and implementing expense cuts totaling 7 to 8% of our 2008 spending. We completed the majority of the staffing reductions relating to this effort by early February, and reductions in professional services, development projects and our marketing investment are also in place. We continue to expect that charges relating to our expense cuts will total approximately $100 million, with about half of that amount to be recognized in each of the first and second quarters of 2009.”

Forward Looking Statements

This press release contains forward looking statements relating to expense reductions and associated charges that reflect management’s current expectations. Achievement of these expectations is subject to certain risks and uncertainties that could cause actual results to differ materially from the expressed expectations. Important factors that may cause such differences include, but are not limited to, the company’s ongoing ability to identify and implement expense savings without disrupting its operations and the final determination of associated charges for the first half of 2009, as well as other factors set forth in the company’s Form 10-K for the year ended December 31, 2008.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.4 million client brokerage accounts, 1.5 million corporate retirement plan participants, 475,000 banking accounts, and $1.0 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com.

The Charles Schwab Corporation Monthly Market Activity Report For February 2009
                             
2008 2009  

% change

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mo.

Yr.

 
Change in Client Assets
(in billions of dollars)
Net New Assets 12.5 17.7 3.8 12.2 10.0 10.4 7.7 6.3 6.6 5.9 9.2 12.1 5.5 (55 %) (56 %)
Net Market (Losses) Gains (17.8 )   (15.4 )   42.1     17.8     (82.0 )   (16.0 )   (1.4 )   (99.4 )   (151.5 )   (53.8 )   16.1     (45.4 ) (60.4 )
 
Total Client Assets
(at month end, in billions of dollars) 1,390.7     1,393.0     1,438.9     1,468.9     1,396.9     1,391.3     1,397.6     1,304.5     1,159.6     1,111.7     1,137.0     1,103.7   1,048.8   (5 %) (25 %)
 
New Brokerage Accounts
(in thousands) 69 83 94 67 65 64 57 72 91 60 73 64 60 (6 %) (13 %)
 
Clients (at month end, in thousands)
Active Brokerage Accounts 7,119 7,162 7,206 7,232 7,256 7,272 7,287 7,310 7,356 7,376 7,401 7,415 7,433 -- 4 %
Banking Accounts 302 318 332 344 355 367 377 399 427 438 447 468 475 1 % 57 %
Corporate Retirement Plan Participants 1,263 1,271 1,284 1,286 1,291 1,306 1,315 1,333 1,342 1,380 1,407 1,510 1,534 2 % 21 %
 
Market Indices (at month end)
Dow Jones Industrial Average 12,266 12,263 12,820 12,638 11,350 11,378 11,544 10,851 9,325 8,829 8,776 8,001 7,063 (12 %) (42 %)
Nasdaq Composite 2,271 2,279 2,413 2,523 2,293 2,326 2,368 2,092 1,721 1,536 1,577 1,476 1,378 (7 %) (39 %)
Standard & Poor's 500 1,331 1,323 1,386 1,400 1,280 1,267 1,283 1,166 969 896 903 826 735 (11 %) (45 %)
 
Clients' Daily Average Trades
(in thousands)
Revenue Trades (1) 242.7 268.1 250.6 258.4 255.3 282.1 227.0 339.7 415.0 348.5 306.1 278.8 292.8 5 % 21 %
Investor Services (2) 21.9 23.1 22.2 24.1 19.7 24.0 20.8 27.5 38.1 24.9 22.2 24.7 27.3 11 % 25 %
Advisor Services (2) 23.5 28.0 21.5 20.9 22.0 29.4 20.6 29.0 43.4 33.2 32.3 23.6 28.4 20 % 21 %
Corporate & Retirement Services (2) 1.3     1.3     1.2     1.3     1.2     1.4     1.3     1.6     1.7     1.4     1.4     1.3   1.4   8 % 8 %
Total 289.4     320.5     295.5     304.7     298.2     336.9     269.7     397.8     498.2     408.0     362.0     328.4   349.9   7 % 21 %
 
Daily Average Market Share Volume
(in millions)
NYSE 1,514 1,727 1,310 1,218 1,400 1,531 1,081 1,603 1,699 1,525 1,340 1,398 1,581 13 % 4 %
Nasdaq 2,344     2,294     1,982     2,069     2,261     2,355     1,894     2,537     2,795     2,089     1,866     2,062   2,300   12 % (2 %)
Total 3,858     4,021     3,292     3,287     3,661     3,886     2,975     4,140     4,494     3,614     3,206     3,460   3,881   12 % 1 %
 
Mutual Fund Net Buys (Sells) (3)
(in millions of dollars)
Large Capitalization Stock 819.1 (69.3 ) 689.1 738.5 284.5 (1,024.5 ) (88.2 ) (1,496.8 ) (2,070.5 ) (1,437.6 ) (1,589.9 ) 428.2 (1,058.5 )
Small / Mid Capitalization Stock (17.2 ) (410.0 ) 10.9 215.8 277.2 (306.5 ) 392.9 (243.7 ) (1,096.1 ) (507.5 ) (362.3 ) 511.3 (350.9 )
International 283.1 (229.8 ) 262.1 800.7 (184.6 ) (1,036.8 ) (743.9 ) (2,240.3 ) (3,022.2 ) (1,403.6 ) (1,463.2 ) 586.3 (742.3 )
Specialized 206.6 (230.2 ) (20.7 ) 164.4 133.5 (192.1 ) (106.3 ) (571.8 ) (1,037.5 ) (328.0 ) (289.2 ) 257.9 89.0
Hybrid 601.8 457.2 457.1 405.7 273.0 227.1 289.5 (320.7 ) (1,229.5 ) (662.3 ) (224.9 ) 213.9 (56.6 )
Taxable Bond 1,047.6 (845.3 ) 582.0 1,113.1 344.2 440.9 487.7 (894.9 ) (2,787.4 ) (729.7 ) 696.5 2,228.3 1,714.7
Tax-Free Bond (31.6 ) 10.9 158.6 459.4 358.4 179.7 263.4 (97.9 ) (622.6 ) (165.0 ) (206.4 ) 506.2 532.8
Money Market Funds 3,996.8 5,478.6 (7,347.2 ) (3,956.8 ) (2,378.1 ) 4,958.3 506.7 3,973.6 2,944.9 2,408.6 4,279.3 (459.4 ) 116.1  
 
 

(1) Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART.

(2) Includes eligible trades executed by clients who participate in one or more of the Company's asset-based pricing relationships.

(3) Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers.

Contact:

Charles Schwab
Greg Gable, 415-636-5847 (Media)
Rich Fowler, 415-636-9869 (Investors/Analysts)

Corporate Public Relations
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888-767-5432

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