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This statistic highlights Charles Schwab’s Revenue Breakdown by Product Category, split across Asset Management and Administration, Bank Deposit Account, Net Interest Revenue and Trading Revenue, reported quarterly from 2016 onwards.
Major sources of revenue for Charles Schwab are:
|Product Category||2022 Q4||2023 Q1||Revenue Contribution for 2023 Q1|
|Asset management and administration fees||$1.05||$1.12||21.90%|
|Bank deposit account fees||$0.35||$0.15||3%|
|Net Interest Revenue||$3.03||$2.77||54.10%|
(All figures in billions, except percentages)
Asset management and administration fees totaled $1.1 billion in the first quarter of 2023, exhibiting a 5% rise year-over-year. However, revenue from Bank deposit account fees showed a decrease of $0.2 billion in the first quarter of 2023. Also, Net interest revenue amounted to $2.8 billion in Q1 2023, showing a 9% decrease when compared with the previous quarter. Trading revenue was $0.89 billion in the first quarter of 2023, indicating a 7% decrease year over year.
Asset management and administration fees
Asset management and administration fees include revenue earned on client assets invested in the money market, mutual funds, and certain investment programs. They are primarily earned from proprietary money market mutual funds, ETFs, fee-based advisory solutions, etc. Due to market volatility and client activities, asset management and administration fees keep on fluctuating depending on changes in clients’ balance sheets.
Bank deposit account fees
Bank deposit account fees consist of revenues resulting from sweep programs offered to certain clients. The Company provides marketing, recordkeeping, and support services related to these sweep programs. These revenues are based on floating and fixed yields as elected by the Company subject to certain requirements, less interest paid to clients, and other applicable fees. Bank deposit account fees are earned and recognized over time and collected every month.
Net Interest Revenue
Net interest revenue is primarily generated through margin lending, securities lending, and segregated and operating cash and investments. Interest liabilities shall be primarily payable to brokerage clients and short-term borrowings. The difference between the interest earned on Interest earning Assets and that which is recovered from funding sources is referred to as ‘Net Interest Revenue’.
Trading revenue is primarily generated through commissions earned for executing trades for clients in individual equities, options, fixed-income securities, and certain third-party mutual funds and ETFs, as well as order flow revenue.
About Charles Schwab Corporation
The Charles Schwab Corporation is a financial services company that provides a wide range of investment and brokerage services to individual investors and institutional clients. Established in 1971 and headquartered in San Francisco, California, the company is one of the leading brokerage firms in the United States.
The primary focus of the Charles Schwab Corporation is to empower individuals to take control of their financial futures. The company offers a comprehensive suite of investment services, including online trading, retirement planning, wealth management, banking, and advisory services. Through its various platforms and tools, the Corporation aims to make investing more accessible, affordable, and understandable for its clients.
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