This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ3G0EM_L.jpg
Still, the company halted stock buybacks and warned its second-quarter revenue would fall by 5% to 9% compared with a year earlier because of higher funding costs.
Shares fell as much as 3.5% before staging a recovery. They were last up nearly 2.4% at $51.99.
“Net revenues may be modestly pressured throughout 2023,” said Bain Rumohr, senior director at Fitch. “But the firm’s size and scale, particularly as it integrates the acquisition of TD Ameritrade, should support profit margins.”
Schwab, which was caught up in a crisis triggered by the failures of two U.S. lenders last month, moved to allay concerns about its financial strength. Its CEO Walter Bettinger addressed commentary about portfolios of debt securities held by banks, including Schwab, which are disclosed as unrealized losses in their earnings.
“I would certainly hope that by this point, the short-driven speculation that we would find ourselves in a position where we would be forced to sell securities that have temporary paper losses has been put to bed,” Bettinger said on a conference call.
Last month, Bettinger told Reuters that Schwab had ample liquidity and would not be seeking to raise capital.
Deposits shrank 11% in the first quarter from the prior quarter and 30% from the same period a year earlier.
About 86% of those deposits were under the Federal Deposit Insurance Corp’s insured limit, the company said.
GRAPHIC – Charles Schwab deposits dipped following the banking turmoil
https://www.reuters.com/graphics/CHARLES%20SCHWAB-RESULTS/zdpxdawwrpx/chart.png
On an adjusted basis, profit rose to 93 cents per share, beating estimates of 90 cents, according to Refinitiv IBES data.
Net interest revenue surged about 27% to $2.77 billion, while total net revenue rose 10% to $5.12 billion.
