UPDATE 2-Charles Schwab earnings drop 47 pct; shares slip

* EPS 14 cents in fiscal fourth quarter

* Revenue down 23 percent at $986 million

* Commences offering of about 26.3 million shares

* Shares slip 2.5 percent after the closing bell

(Adds shares, trading, assets, background)

NEW YORK, Jan 19 (Reuters) - Charles Schwab Corp SCHW.O
said on Tuesday quarterly earnings fell 47 percent, missing
Wall Street estimates by a penny, but in line with its own
forecast, as low interest rates and a trading slump among
individual clients hurt the broker.

The largest U.S. online brokerage separately said it would
offer about 26.3 million shares. The proceeds will in part go
toward moving some client balances away from money market
funds, which earn little interest with rates near zero.

Schwab shares slipped 2.5 percent after the close of
markets, when the company reported its results.

Schwab earned $164 million, or 14 cents per share, in the
quarter that ended Dec. 31, down from earnings of $308 million,
or 27 cents per share, a year earlier.

Revenue dropped 23 percent to $986 million. Analysts on
average expected San Francisco-based Schwab to earn 15 cents
per share on $993.4 million in revenue, according to Thomson
Reuters I/B/E/S.

Last month, the company said it expected to log earnings of
between 13 cents and 15 cents per share. The big broker runs a
fast-growing bank, offers investment advice and competes with
both online rivals and full service Wall Street firms.

Schwab attracted $24.8 billion in net new assets in the
quarter, up 25 percent from the previous quarter.

Trading revenue dropped 36 percent as the measure of daily
trading activity slipped 3 percent from the previous quarter.
It slipped 28 percent from a year ago, as clients were far less
active at the end of last year compared with the
crisis-inspired market volatility that closed out 2008.

The U.S. Federal Reserve has kept rates low to kick-start
the recession-battered economy. This has shaved Schwab's
ability to earn interest from assets under management and
forced it to waive another $110 million in fees on its money
market funds in the quarter.

Schwab lowered on Tuesday trading fees for its less active
traders by about $4 to $8.95 per trade, a move announced
earlier this month that analysts said could spark a pricing war
after some five years of relative stability.

The fee change effects up to a third of Schwab's overall
trading. [ID:nN07178752]

Rival TD Ameritrade Holding Corp said earlier on Tuesday it
had no current plans to adjust its flat rate of $9.99 per trade
for all clients. The company also reported a 26 percent profit
drop, and its shares jumped 3.3 percent. [ID:nN19199297]
(Reporting by Jonathan Spicer; editing by Matthew Lewis and
Andre Grenon)