Charles Schwab Reports 44% Profit Increase in Q4

(Reuters) – Brokerage firm Charles Schwab (NYSE:SCHW) announced on Tuesday a 44% increase in profit for the fourth quarter, driven by a surge in asset management fees. This news propelled its shares up more than 6% in premarket trading.

Importance of the Results

These results mark the first under new CEO Rick Wurster, potentially setting the direction for the company following Walt Bettinger’s retirement after 16 years as chief executive at the end of 2024.

Schwab’s diversified business model encompasses brokerage services, asset management, banking, and other financial solutions, with results often reflecting general investment trends.

Context

The recent market rally, fueled by expectations of lower corporate taxes and deregulation under newly elected U.S. President Donald Trump, contributed to an increase in Schwab’s assets under management and corresponding fees.

By the Numbers

• Total client assets rose 19% to $10.10 trillion in the three months ended December 31.
• Asset management and administration fees surged 22% to $1.51 billion.
• Net revenues climbed 20% to $5.33 billion in the reported quarter.
• The company posted an adjusted profit of $1.01 per share for Q4, compared to $0.68 per share a year earlier.