Charles Schwab Stock Sinks as CEO Says Firm Will Get 'Smaller'

Charles Schwab (SCHW) shares tumbled successful intraday trading Tuesday aft Chief Executive Officer (CEO) Walt Bettinger warned that nan financial services institution plans to downsize successful bid to support profitability.

The discount brokerage plans to trust connected off-balance expanse deals pinch extracurricular partners to clasp customers' deposits successful bid to much efficiently usage capital, Bettinger said connected nan company's second-quarter net call, according to a study from Bloomberg.

“These various actions should lead—again complete time—to a slope that is somewhat smaller than our slope has been successful caller years, while retaining nan expertise to meet our clients’ banking needs, little our superior strength and, importantly, protect nan economics we’re capable to make from owning a bank,” Bettinger was quoted arsenic saying.

New Brokerage Accounts Miss Expectation

The Westlake, Texas-based institution reported 985,000 caller brokerage accounts successful nan quarter, up from 960,000 a twelvemonth earlier but beneath nan 1.04 cardinal statement from analysts polled by Bloomberg.

Schwab posted adjusted earnings per stock (EPS) of 73 cents per stock connected gross of $4.69 billion, astir successful statement pinch analysts' statement estimates compiled by Visible Alpha.

“Schwab’s ‘no trade-offs’ worth proposition continued to resonate pinch investors, arsenic caller brokerage accounts opened this twelvemonth grew to complete 2 cardinal and 2nd 4th halfway plus gathering equaled $61.2 billion–a year-over-year summation of 17%,” Bettinger said successful a statement.

Shares of Schwab fell astir 9% to $68.57 arsenic of 12:30 p.m. ET Tuesday to nudge into antagonistic territory for 2024.