The Charles Schwab Corporation announced that its net income for the quarter ended September 30, 2005, was $207 million. In comparison, the company reported a net loss of $41 million for the third quarter of 2004 and net income of $186 million for the second quarter of 2005. For the nine months ended September 30, 2005, the company’s net income was $538 million, compared with net income of $233 million during the same period in 2004.
Chairman and CEO Charles Schwab commented, “Over the last fifteen months, our primary focus has been restoring our value proposition and reconnecting with our clients. Our success in this effort is reflected in Schwab’s business momentum — September marked our fourth consecutive month of net new assets in excess of $6 billion and our net new assets of $23.4 billion for the third quarter of 2005 were 80% higher than last year’s third quarter. Total client assets set a new record of $1.166 trillion at month-end September, up 16% from September 2004. Our total revenues increased by 14% versus a year ago and our net income rose to $207 million for the quarter, the second- highest level in our history.”
CFO Christopher Dodds said, “Schwab has now achieved ten consecutive quarterly increases in its non-trading revenues, as the Company continues to benefit from its strength in attracting client assets and the rising interest rate environment. Non-trading revenues accounted for 84% of Schwab’s total third quarter revenues. Our revenue growth, combined with our ongoing focus on expense discipline, yielded a 29% pre-tax margin for the third quarter of 2005 and a year-to-date pre-tax margin of 27%. Capital management remains a priority — we limited our capital expenditures to $25 million and repurchased $190 million of common stock during the third quarter, which helped the Company achieve a 19% return on equity, the highest quarterly level since the first quarter of 2000.”
Dodds added, “Client engagement continues to be strong thus far in October — daily average revenue trades for the first nine trading days of the month totaled 229,000.”