The US brokerage company, Charles Schwab released its financial report for the second quarter of the year today (Tuesday), disclosing a decline in revenue and net income. Despite an uptick in the company's asset management income, interest income dropped compared to the same period of last year.

Based in Westlake, Texas, Charles Schwab offers a broad range of financial services, including brokerage, exchange -traded funds, online trading, and investment services. The company uses funds from clients to invest in fixed-income assets and for lending.

Declining Interest Income

However, Charles Schwab has recorded a decline in interest income amid the hiking of interest rates by the Federal Reserve, which has forced investors to move their funds to investments with higher returns. The Federal Reserve has raised interest rates by five percentage points since March last year.

Schwab recorded a decline of 27% in net income in the second quarter to USD $1.2 billion, compared to USD $1.8 billion reported in the same period of last year. Similarly, the company reported a decline of 9% in revenue for the first half of the year to USD $2.9 billion.

On top of that, the brokerage company reported declines of 8% and 0.07% in net revenue for the three-month and six-month periods ended June 30, respectively. However, Schwab added 1 million new brokerage accounts in the period partly due to an uptick in asset management business.

Better-than-Expected Results

Commenting about the financial report, Schwab's CEO, Walter Bettinger, said: "Against an improving, yet still unsettled backdrop, clients increased their utilization of help and advice at Schwab during the quarter, reflecting investors' continued trust in us to support them on their journey towards a better financial future."

Additionally, during the quarter, Schwab reported USD $52 billion of new additional assets to bring the total assets year-to-date to more than USD $180 billion, Bettinger added.

The drop in Charles Schwab's net income was lower than the market analysts' estimates, Reuters reported. The analysts from Refinitiv had projected that the financial services firm would post a net income of 71 cents per share. However, the company reported adjusted earnings per share of 75 cents.

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