O/t , Howard marks on silicon bank


1 Like

It will be very interesting to watch how, sticky, deposits are going forward.” Charles Schwab reported strong overall first-quarter results, with net income up 14% from the same quarter last year, but the brokerage firm faces a problem familiar to many financial companies: deposit outflows as customers search for higher yields.

  • Schwab’s main brokerage and custodial business brought in $132 billion of core net new assets, in line with expectations, but its bank deposits fell 11% from the fourth quarter and 30% from last year’s first quarter, a sign that customers are shifting money from low-paying bank accounts to higher-yielding options.
  • State Street, one of the largest custody banks, said deposits were about $224 billion at the end of the first quarter, down 5% from the fourth quarter and 11% from one year ago.
  • Amid regional bank turmoil, U.S. money-market funds captured net inflows of about $362 billion in March, Morningstar Direct said. That compares with the record $686 billion net inflows in March 2020, but was up from $51.6 billion in February.
  • Apple is offering high-yield savings accounts through Goldman Sachs for Apple Card holders. The accounts have no fees, no minimum deposits or balance requirements, and offer an initial interest rate of 4.15%. Customers can deposit or withdraw money through a linked bank account.

What’s Next: Schwab borrowed $45.6 million from Federal Home Loan Banks, up from $12.4 million in the fourth quarter, but CFO Peter Crawford told analysts that FHLB loans “won’t be part of our long-term financial picture.” The company is pausing its share buyback program.“”