yet another Schwab post
(more on life sciences stuff in a week or so)
Schwab lost a shitload of deposits last quarter. Not as many as the most vociferous bears feared (hoped?) but still, a lot, more than I expected. Across on-balance sheet and BDA balances, it looks like $86bn1, or nearly ~18% of the 4q22 deposit base, sorted out of bank. This is far greater than the cash sorting experienced during any quarter last year, when Fed Funds spiked from ~0% to 4%+.
In late March, CEO Walt Bettinger declared “there would be a sufficient amount of liquidity right there to cover if 100% of our bank’s deposits ran off…Without having to sell a single security.” Schwab continues to abide by this assertion not just in theory but in practice, plugging most of last quarter’s deposit outflows with high cost FHLB advances (+$46bn) and brokered CDs (+$25bn).