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Charles Schwab (New York Stock Exchange: SW) Second-quarter adjusted earnings probably won't be higher than the first quarter, Chief Financial Officer Peter Crawford said Wednesday during his first Institutional Investor Day. The online brokerage's shares increased their losses after Crawford's statements, falling 2.8% in the mid-afternoon trade.
Transactional cash was down about 2% in May, he noted, in part due to the residual impact of tax season. This, combined with the decline in transactional cash seen earlier in the year, points to a “relatively modest” expansion in the second quarter versus the first quarter.
However, Schwab (SCHW) still sees a net interest margin close to 3% by the end of 2025.
And it doesn't end there, he said. Following the repayment of supplementary borrowings by the company, long-term NIM accumulation is expected to be further boosted through reinvestment of the fixed rate portfolio.
All told, this year “has started off much better than we expected at the beginning of the year,” Crawford said, pointing to higher transactional cash deposits, stock market appreciation, as well as strong growth in margin lending.
