Finance
Charles Schwab Sinks After Vowing to Shrink Bank Over Time
- Firm will try to pay down high-cost loans from other sources
- That could use capital that would have been for buybacks: CFO
The company will also begin to restructure its balance sheet in order to shorten the duration of some of its investment portfolio.
Photographer: Angus Mordant/BloombergThis article is for subscribers only.
Charles Schwab Corp. shares suffered their biggest intraday drop since the depths of last year’s regional-bank crisis after the investing giant warned it will have to shrink itself in order to protect profits.
Going forward, Schwab is planning to rely more on off-balance sheet arrangements to house customers’ deposits, Chief Executive Officer Walt Bettinger said on a conference call with analysts. By relying on partners like Toronto-Dominion Bank, such deals would allow Schwab to more efficiently use capital, he said.