Charles Schwab Discloses Results of the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review
June 27 2022 - 4:30PM
Business Wire
The Charles Schwab Corporation (CSC or Schwab) announced today
that it has received the results of the Federal Reserve’s 2022
Comprehensive Capital Analysis and Review (CCAR). These results
included the Federal Reserve’s estimate of Schwab’s minimum capital
ratios under the supervisory severely adverse scenario for the
nine-quarter horizon beginning December 31, 2021 and ending March
31, 2024. Based on these results, Schwab’s calculated stress
capital buffer (SCB) was well below the 2.5% minimum, resulting in
an SCB at that floor.
This 2.5% SCB will be applicable to Schwab for the four-quarter
period beginning October 1, 2022. Schwab’s Common Equity Tier 1
(CET1) ratio of 18.9% as of March 31, 2022 was well in excess of
the regulatory minimum of 4.5% combined with the SCB of 2.5% due to
the relatively low risk nature of our balance sheet assets.
Schwab ended the first quarter of 2022 with a consolidated Tier
1 Leverage Ratio of 6.1%, down slightly from 6.2% at year-end 2021.
Though the consolidated Tier 1 Leverage Ratio is below the
long-term operating objective for CSC, this ratio is well above the
regulatory minimum. The pace of return to Schwab’s long-term
operating objective over time depends on a number of factors
including the overall size of the consolidated balance sheet,
earnings, and capital issuance and deployment.
CFO Peter Crawford commented, “Schwab’s inaugural CCAR stress
test results highlight our thoughtful approach to capital, and
overall risk management. The strength of our ratios accentuates the
durability of our all-weather model and reinforces our confidence
that we are well positioned to serve our clients across a wide
range of challenging macroeconomic environments. While there are no
changes to our dividend or other capital actions to report today,
we’ll provide updates going forward as conditions and our plans
change. As always, we expect to manage our capital position in a
manner consistent with supporting long-term business growth and
enhancing stockholder value, using an effective combination of
earnings, dividends, and other appropriate means of returning
excess capital.”
Forward-looking Statements
This press release contains forward-looking statements relating
to the company’s capital ratios; balance sheet assets; Tier 1
Leverage Ratio operating objective; all-weather model; positioning;
dividend and other capital actions; capital management to support
business growth and enhance stockholder value; and capital returns.
These forward-looking statements reflect management’s expectations
as of the date hereof. Achievement of these expectations, beliefs,
and objectives is subject to risks and uncertainties that could
cause actual results to differ materially from the expressed
expectations.
Important factors that may cause such differences include, but
are not limited to, general market conditions, including equity
valuations and the level of interest rates; balance sheet
positioning relative to changes in interest rates; interest earning
asset mix and growth; competitive pressures on pricing; client cash
sorting; client sensitivity to rates; the level of client assets,
including cash balances; the migration of bank deposit account
balances; capital and liquidity needs and management; market
volatility; the level and mix of client trading activity; margin
loan balances; securities lending; the company’s ability to attract
and retain clients and registered investment advisors and grow
those relationships and associated client assets; the company’s
ability to monetize client assets; the company’s ability to develop
and launch new and enhanced products, services, and capabilities,
as well as enhance its infrastructure, in a timely and successful
manner; client use of the company’s advisory solutions and other
products and services; the company’s ability to support client
activity levels and attract and retain talent; the Ameritrade
integration, including expected synergies; the company’s ability to
manage expenses; the effect of adverse developments in litigation
or regulatory matters and the extent of any charges associated with
such matters; any adverse impact of financial reform legislation
and related regulations; and other factors set forth in the
company’s most recent reports on Form 10-K and Form 10-Q.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading
provider of financial services, with 33.8 million active brokerage
accounts, 2.3 million corporate retirement plan participants, 1.7
million banking accounts, and $7.30 trillion in client assets as of
May 31, 2022. Through its operating subsidiaries, the company
provides a full range of wealth management, securities brokerage,
banking, asset management, custody, and financial advisory services
to individual investors and independent investment advisors. Its
broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD
Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC,
www.sipc.org), and their affiliates offer a complete range of
investment services and products including an extensive selection
of mutual funds; financial planning and investment advice;
retirement plan and equity compensation plan services; referrals to
independent, fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based
investment advisors through Schwab Advisor Services. Its primary
banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an
Equal Housing Lender), provides banking and lending services and
products. More information is available at www.aboutschwab.com.
TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are
separate but affiliated companies and subsidiaries of TD Ameritrade
Holding Corporation. TD Ameritrade Holding Corporation is a wholly
owned subsidiary of The Charles Schwab Corporation. TD Ameritrade
is a trademark jointly owned by TD Ameritrade IP Company, Inc. and
The Toronto-Dominion Bank.
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version on businesswire.com: https://www.businesswire.com/news/home/20220627005562/en/
MEDIA: Mayura Hooper Charles Schwab Phone:
415-667-1525
INVESTORS/ANALYSTS: Jeff Edwards Charles Schwab Phone:
415-667-1524
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