Charles Schwab weighs possible acquisitions

Charles Schwab Corp., the largest U.S. discount broker, may use proceeds from the sale of its U.S. Trust private-banking unit to make acquisitions, Chief Executive Charles Schwab said Monday.

Schwab told investors during a presentation at its San Francisco headquarters that his company might be interested in buying a firm that would expand its presence in the 401(k) retirement market.

Any acquisition would be the first since January 2004, when the company bought SoundView Technology Group. Since rejoining the brokerage two years ago, Schwab has returned his firm to its roots as the original discount brokerage catering to mass-market individual investors. He has slashed the standard commission to $12.95 and agreed to sell U.S. Trust, which courts people with more than $2 million to invest.

“You can count on us being highly disciplined whatever we do,” Schwab said, adding that he might consider returning the money directly to investors through a share buyback or a special dividend.

Bank of America Corp. said Nov. 20 that it would pay $3.3 billion in cash for U.S. Trust, which was growing more slowly and was less profitable than the rest of Schwab. Proceeds might be $2.5 billion after taxes, Schwab said. The transaction is scheduled to be completed in the second quarter of next year.