Charles Schwab Corp. reported declines in profit, new assets and deposits as it navigated a tumultuous year of interest rate hikes that dented the firm's balance sheet — a set of results that initially sent its shares tumbling.
Schwab said net new assets fell 48% to $66.3 billion in the fourth quarter while net income also dropped by almost half.
Bank deposits in the period declined 21% to $290 billion and the company's total retail brokerage accounts fell short of analyst estimates at 34.8 million.
Shares in the company fell as much as 7% before paring some of those losses Wednesday. They traded at near $63.50 at 1:45 p.m. in New York — a drop of about 1.3% — and are down roughly 8% so far in 2024, after declining 17.4% in 2023.
Schwab closed out what was one of the firm's most turbulent years in its five-decade-plus history, swept up in the regional banking chaos as interest rate hikes eroded the value of its investments.
Consumers also pulled their deposits in search of higher-yielding alternatives, compounding those pressures.
"No one at Schwab is kidding themselves that everything is perfect right now," Chief Executive Officer 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."
