Schwab Reports Monthly Activity Highlights
The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of April 2022 include:
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CFO Peter Crawford commented, "Client cash disbursements during this year's tax season were the highest we've ever seen at Schwab. These outflows include the impact of client portfolio actions taken during 2021, a year marked by strong equity market performance and robust trading activity. Such seasonal activity is distinct from flows within client accounts rebalancing their cash positions between daily liquidity and investments such as money market funds. This rebalancing, or sorting, activity tends to occur as an extended period of low interest rates shifts into a rising rate environment and clients refresh their allocations."
"While the Federal Reserve has taken initial steps to move interest rates higher thus far in 2022, short rates are just now approaching the point where we'd expect to see clients start to rebalance their cash positions," Mr. Crawford continued. "Assuming the Fed's tightening cycle remains consistent with current forecasts, we believe we could see rebalancing activity begin to surface before the end of the second quarter. Such actions may lead to a slight decline in balance sheet assets from current levels over the next quarter or two (assuming clients don't meaningfully shift their investments from equities to cash). As we help clients navigate this environment, we remain confident that the successful execution of our 'Through Clients' Eyes' strategy, coupled with our all-weather financial model, will support strong long-term growth - in our client base, and in value for our stockholders."
Important factors that may cause such differences include, but are not limited to, general market conditions, including equity valuations, trading activity, and the level of interest rates; 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 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; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities to contain the spread of the virus and the economic impact; and other factors set forth in the company's most recent reports on Form 10-K and Form 10-Q.
About Charles Schwab
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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