The Zhitong Finance App learned that Charles Schw.US (SCHW.US) released the financial report for the third quarter of 2026 before the market on October 15. Net revenue for the quarter was $7.171 billion, up 17% year over year and 1% month on month, but slightly below market expectations of $7.18 billion; adjusted earnings per share of $1.69, up 29% year over year, higher than market expectations of $1.65; net profit of $2,906 million and diluted earnings of $1.62 per share, up 29% year over year according to GAAP.
In terms of revenue structure, net interest income of US$3.476 billion was up 14% year on year and 4% month on month, and the net interest spread expanded to 3.04% (2.88% in the same period last year); asset management and administrative expenses of US$1,913 million, up 14% year over year, also a record; bank deposit account fees of US$345 million, up 40% year over year; however, although transaction revenue of US$1,158 million increased 16% year over year, down 5% month on month, the year-on-year growth rate was lower than the market's previous forecast of 18.2%. Total expenses for the quarter (excluding interest) were $3,394 million, up 9% year over year, basically the same as the previous quarter; GAAP profit margin before tax was 52.7%, 54.8% after adjustment.
On the customer and asset side, customer assets at the end of the quarter were US$13.33 trillion, up 15% year on year; core net assets added US$190.4 billion, up 38% year over year. The company said it corresponds to an annualized growth rate of 5.8%, which is significantly higher than J.P. Morgan analyst Kenneth Worthington's estimate of about US$160 billion on October 9. By business, Advisor Services for independent investment advisors added net assets of US$121 billion, up 47% year over year; Investor Services for retail added net net assets of US$72.3 billion, up 37% year over year. 1.243 million new brokerage accounts were opened during the quarter, bringing the total number of client accounts to 48.6 million; margin balances increased 14% month-on-month to US$187.9 billion, up 93% year-on-year, and the average daily trading volume increased 44% to 10.7 million transactions.
In terms of earnings quality, the company's adjusted caliber excludes $151 million pre-tax items ($141 million amortization of intangible assets and $10 million merger and acquisition consolidation expenses), which represents the difference between GAAP and adjusted earnings of $0.07 per share. On the capital side, the consolidated tier-1 leverage ratio at the end of the quarter was 8.9% (7.0% after adjustment for other comprehensive income); 4.7 million shares were repurchased during the quarter, at a cost of $500 million, and a common stock dividend of $0.32 per share was declared — the same as the previous quarter. The company raised this dividend from $0.27 to $0.32 in the first quarter of this year.
Customer cash behavior is worth paying attention to: At the end of the quarter, collected transactional cash was US$492.8 billion, up US$7.1 billion month-on-month, but the share of customer cash in clients' assets fell to 8.9%, down 50 basis points year over year. The company launched its AI assistant Charley this quarter and partnered with Anthropic to provide its Claude for Financial Advisors to the independent investment advisors it serves.