The Charles Schwab Corp. (NYSE: SCHW) is among the most affected financial firms facing a drop in customer deposits due to the increased interest rate environment in the United States, according to its Q3 2023 report.
This presents a real challenge for a company that relies primarily on clients’ uninvested cash to fund its interest-earning businesses. Charles Schwab’s consumer bank deposits tumbled 28% year-over-year (YoY), causing its net interest revenue to drop 23.5% in the third quarter, which also negatively affected its quarterly revenue of $4.61 billion (-16.2% from Q2).
A recent post on X (Twitter) by the event-driven trader Gurgavin Chandhoke highlights Charles Schwab as the financial company with more accumulated losses in bank deposits since Q3 2022.
SCHW price analysis
Meanwhile, Charles Schwab stock has lost more than 25% in both the last quarter and in the year-over-year period mentioned for Bitcoin’s positive price performance. SCHW is trading at $50.87 per share by press time, as opposed to $68.19 per share three months ago, and $68.26 per share on October 21, 2022.
Walter William Bettinger, Charles Schwab’s CEO and Co-Chairman, said that the Federal Reserve’s actions are slowing the rate of inflation, but at a significant cost to the markets, to consumers, to investors, and to firms like Schwab. On that, JPMorgan CEO warned we are living in ‘the most dangerous times’.
