Charles Schwab says calculated stress capital buffer well below 2.5%

The Charles Schwab announced that it has received the results of the Federal Reserve’s 2024 Comprehensive Capital Analysis and Review. 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, 2023 and ending March 31, 2026. Based on these results, Schwab’s calculated stress capital buffer remains well below the 2.5% minimum, resulting in a SCB at that floor. This 2.5% SCB will continue to be applicable to Schwab for the four-quarter period beginning October 1, 2024. Schwab’s Common Equity Tier 1 ratio of 26.71% as of March 31, 2024 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 2024 with a consolidated Tier 1 Leverage Ratio of 8.83%, up from 8.53% at year-end 2023. CFO Peter Crawford commented, “Schwab’s CCAR stress test results further reinforce the durability of our approach to capital management which helps keep us well positioned to serve the evolving needs of our clients across a wide range of environments. As we await the finalization of anticipated rule changes, we remain focused on continuing to enhance our strong capital levels. Looking ahead, the firm’s priorities for managing capital remain unchanged: supporting profitable growth through-the-cycle, while also bolstering long-term stockholder value via our common dividend target and the opportunistic return of excess capital over time.”