Charles Schwab Corp. posted a 34% drop in third-quarter profit as low interest rates and depressed stock prices continue to cut into asset management fees.
Schwab's decision this summer to waive certain fees on some of its money market funds is taking a toll on its asset management fees, which typically account for nearly half of its revenue.
Chief Financial Officer Joe Martinetto said writedowns on its investment portfolio remain contained, with $11 million in credit-related charges in the quarter. Losses were mostly from alt-A mortgage-backed securities.
Schwab's income fell to $200 million, or 17 cents a share, from $304 million, or 26 cents a share, a year earlier. Revenue fell 19%, to $1.01 billion as asset management and administration fees fell 24% and interest revenue slid 34%. Analysts surveyed by Thomson Reuters expected earnings of 17 cents on revenue of $1.03 billion. Total assets rose 5%, to $1.36 trillion. New accounts rose 41%, to 29,000, putting the total at 5.3 million, up 3%.