Charles Schwab Corp., which started offering a high-yield checking account in the second quarter, said Tuesday that its retail banking arm's assets grew 37% in the period from a year earlier, to $12.5 billion.
The number of accounts at Schwab Bank in Reno grew 17% from the first quarter and 26% from a year earlier, to 177,000. Related Links
The checking account that offers a 4.25% annual percentage rate and requires no minimum balance is "probably the big story in the banking part of the business," Joe Martinetto, chief financial officer, said in an interview. "We haven't even really gotten out with the largest part of the marketing campaign. You'll continue to see us make a big push on that" for the rest of the year, he said.
Mr. Martinetto said that the product fits in with the San Francisco company's goal of attracting younger clients who now put most of their money in traditional banks. The strategy is to "get them into a banking product here but also get them started into developing into investor clients down the road," he said.
Mortgage and home equity loans at the bank rose 26% from a year earlier, to $2.7 billion, and mortgage originations jumped about 40% from the first quarter, to $536 million.
For the company overall, net income rose 16% from a year earlier, to $292 million, or 23 cents a share, matching the average analyst estimate, according to Thomson Financial.
Nontrading revenue, which Mr. Martinetto noted makes up 84% of overall revenue, set a record at $1 billion, up 14% from a year earlier and about 6% from the first quarter.
Client assets rose 23% from a year earlier, to $1.4 trillion.
