Past CFO Commentary

The commentary in this section speaks only as of the date specified below. The company makes no commitment to update any of this information.

March 13, 2020

With global health concerns relating to COVID-19 weighing on the macroeconomic environment and driving heightened volatility in the financial markets, we thought it might be helpful to spend some time discussing the effects on client activity. Not surprisingly, our clients have turned to us for help in this environment and we’ve been there to support them. The $45.3 billion in core net new assets brought to Schwab during the first two months of 2020 represents the strongest start to any year in our history. Our clients have set multiple new single-day records for trading in recent weeks, reaching a high of 2.7 million trades on March 9th; they averaged 1.3 million trades per day during the month of February, up 53% year-over-year. And new accounts and new-to-Retail households continue to be quite strong, with February activity up 38% and 43%, respectively over 2019 levels.

Consistent with our experience in other periods of heightened uncertainty, and reinforcing the resilience of our all-weather business model, we have also supported a significant increase in client cash allocations recently – during the first eight business days of March, their sweep balances increased $10.5 billion, following an increase of $4.9 billion in late February. Stronger levels of trading-related and net interest revenue generated by these client actions should help soften the impacts of lower rates and equity market valuations, enabling us to deliver linked-period top-line growth for the first quarter of 2020.

We recognize that this extraordinary environment demands a relentless focus on executing our “Through Clients’ Eyes” strategy, even as employees can feel just as overwhelmed as clients. As we shared today in an internal message, we are grateful for the efforts of so many passionate and smart ‘Schwabbies’ working tirelessly right now to ensure we’re doing everything we can to care for our colleagues and continue to serve our clients when they need us most.

Forward-looking statements

This commentary contains forward-looking statements relating to revenue for the first quarter of 2020 and the impact of lower rates and equity market valuations. Achievement of these expectations 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 the level of interest rates, equity valuations, and trading activity; the level of client assets, including cash balances; client sensitivity to rates; competitive pressures on pricing, including deposit rates; client cash sorting; the company’s ability to attract and retain clients and RIAs and grow those relationships and client assets; and other factors set forth in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K.