Charles Schwab (SCHW): Record $190.4bn of new client assets and 17% sales growth
Charles Schwab, the US brokerage and bank, reported third-quarter sales of $7.17bn, up 17% from a year earlier, and adjusted profit per share of $1.69, up 29% and $0.03 above the $1.66 analysts expected. Clients brought in a record $190.4bn of new assets and traded 44% more than a year ago. Interest income, its biggest earner, grew more slowly.
What happened
On Thursday 15 October 2026, Schwab published results for the third quarter, the three months to 30 September, in an SEC filing and a press release. Net revenues, the company's total sales after interest costs, were $7,171 million, against $6,135 million a year earlier. Net income under US accounting rules (GAAP) was $2,906 million, or $1.62 per diluted share. Excluding $151 million of pre-tax costs linked to acquisitions, adjusted net income was $3,021 million, or $1.69 per share. Chief executive Rick Wurster said clients had entrusted Schwab with $190.4 billion in core net new assets, an annualised growth rate of 5.8%.
Core net new assets are the money and securities clients move to Schwab, excluding one-off transfers tied to acquisitions. The firm opened 1.2 million new brokerage accounts in the quarter and now has 48.6 million client accounts. Total client assets reached $13,333.2 billion ($13.33 trillion), up from $11,593.9 billion a year earlier. Coverage of the share price reaction differs: Finviz and Tradingpedia reported falls of about 1.3% to 2.6%, while TIKR reported about 5%. We could not reconcile these, so we give no single figure.
The numbers, explained
Our working on the headline: sales rose $1,036 million ($7,171M less $6,135M), which is 16.9% and is shown as 17%. GAAP profit rose from $2,358 million to $2,906 million, up 23.2%. GAAP profit per share rose from $1.26 to $1.62 (up 28.6%), faster than profit, partly because buybacks reduce the number of shares; it bought back 4.7 million shares for $0.5 billion this quarter. Adjusted profit per share rose from $1.31 to $1.69, up 29.0%. Adjusted figures are non-GAAP: they remove the $151 million of costs ($141 million amortisation of intangible assets bought in deals and $10 million of deal and integration costs). Against analysts' average forecast of $1.66, the adjusted result was $0.03 higher; sales of $7.17bn were slightly below the roughly $7.2bn forecast.
The mix of income matters. Net interest revenue, the gap between what Schwab earns on loans and investments and what it pays on client cash, was $3,476 million, up 14.0% from $3,050 million and 48.5% of total sales ($3,476M divided by $7,171M). Asset management and administration fees were $1,913 million, up 14.3%. Trading revenue was $1,158 million, up 16.4% from $995 million but down 5% from $1,215 million in the second quarter. Daily average trades were 10.7 million, up 44% from 7.4 million a year ago and down about 10% from 11.9 million in the second quarter. Lending to clients to buy shares, called margin loans, stood at $187.9 billion, nearly double the $97.2 billion of a year earlier (up 93%) and up 14% from $165.1 billion in the second quarter.
Costs and profitability: expenses excluding interest were $3,394 million, up 9.0% from $3,114 million, which is slower than sales growth. The pre-tax profit margin, the share of each dollar of sales left as profit before tax, was 52.7%, against 49.2% a year earlier, meaning Schwab kept about 53 cents of each sales dollar before tax. The net interest margin, which measures interest earned on assets less interest paid as a percentage of those assets, was 3.04%, against 2.88% a year earlier. Bank deposits at quarter end were $244.1 billion, 2% above last year but 2% below the $249.7 billion at the end of June. Quarterly dividends declared were $0.32 per share, against $0.27 a year earlier.
Why it matters
Schwab makes money in three main ways. It earns interest on the cash clients hold and on loans such as margin loans; it charges fees for managing and administering assets; and it earns from trading activity. Because it holds $13.33 trillion of client assets, small changes in activity or interest rates move its results. A record inflow of $190.4 billion shows clients still choosing the platform and, as asset balances are what its fees and interest are earned on, supports all three income streams.
The quarter also shows where growth is shifting. Net interest revenue grew 14%, but TIKR reports that this was slower than in recent periods and that management said full-year revenue growth and margin expansion should land near the lower end of its earlier ranges. The Schwab release we read contains no numeric outlook, so we treat that as a single-source report. For customers, heavier margin lending and trading mean more investors are using borrowed money to buy shares, which raises their exposure if markets fall; for the sector, it suggests retail trading activity remained strong in the quarter.
What to watch next
Schwab's capital ratios in the release are labelled preliminary as of 30 September 2026. The company also publishes a monthly activity report with client assets, new accounts and net new assets, which will show whether the record inflow continues. We did not find a dated fourth-quarter results announcement in the sources we read, so check Schwab's investor relations site for the date.
- Key terms in plain words
- Core net new assets: money and securities clients add to Schwab, leaving out one-off transfers from acquisitions.
- Net interest revenue: interest earned on loans and investments, less interest paid out to depositors.
- Margin loan: a loan from a broker to a client to buy shares, secured on the client's holdings.
- Non-GAAP (adjusted) profit: profit with certain one-off or deal-related costs removed.
Sources
More on Charles Schwab (SCHW) · Financials takes
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