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A Charles Schwab branch in midtown Manhattan.


Charles Schwab Corp., the biggest online broker by market capitalization, said fourth-quarter net income rose 29 per cent from a year earlier on growing client assets, but fell 15 per cent from the third quarter.

The company and its rivals, viewed as proxies for individual investor interest in the market, continued to be challenged by rock-bottom interest rates that hurt its returns on investing clients' money.

San Francisco-based Schwab said net profit rose to $211-million (U.S.), or 15 cents a share, matching the mean consensus estimate of 20 analysts surveyed by Thomson Reuters I/B/E/S. Third-quarter earnings totaled $247-million.

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Revenue jumped 9 per cent and expenses were up 1.2 per cent from the year earlier. Schwab last month forecast an 8-per-cent gain in revenue, a 1-per-cent decline in expenses and a jump of about 25 per cent in net income before payment of preferred dividends.

Low interest rates have also led Schwab and its rivals to waive fees charged to clients for their money-market investments out of concern the low-yielding vehicles would have negative returns if a fee was imposed.

Schwab waived $587-million in money-market fees in 2012, including $142-million in the fourth quarter. It waived $1-billion in the previous two years.

Total client assets grew 3 per cent in the quarter, and 16 per cent from a year earlier, to $1.95-billion, but average revenue-producing trading fell 14 per cent from the third quarter.

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