Schwab Falls on Results as CEO Says No One's 'Kidding Themselves'

“No one at Schwab is kidding themselves that everything is perfect right now,” CEO Walt Bettinger said Wednesday during a call discussing earnings. “Perhaps it was the most challenging in my time at Schwab — certainly the most challenging since the bursting of the internet bubble in 2000.”

Shares in the company fell as much as 7% and traded down 5% at 10:03 a.m. in New York. They are down roughly 10% so far in 2024, after falling 17.4% in 2023.

Bettinger recently said that firms could shorten the durations of their securities books, helping them avoid similar challenges.

The Westlake, Texas-based brokerage had also turned to more expensive forms of funding, such as retail certificates of deposit and Federal Home Loan Bank advances, to assist those consumers looking for higher yields.

On Wednesday, CFO Peter Crawford reiterated that the firm is moving away from those sources, saying it repaid 18% of peak balances reached in May 2023, “as realignment activity decelerated by almost 80% during the second half of the year, including a seasonal increase in client cash in December.”

(Credit: Bloomberg)