- CEO Walter Bettinger said that the day Silicon Valley Bank began to collapse, capital inflows increased significantly.
- He also told CNBC that he purchased 50,000 shares of Charles Schwab for his personal account on Tuesday.
- He said Charles Schwab is managed conservatively and has a different business model than local banks.
When panic over the Silicon Valley Bank collapse peaked in financial markets on Friday, Charles Schwab clients poured $4 billion into the company that day, CEO Walter Bettinger said.
That’s double the roughly $2 billion in daily inflows Schwab has averaged so far this month. he told CNBC on tuesday. Also, for the entire month of February, the client net added $42 billion in new assets.
“What we’re actually seeing is a significant inflow of assets into the company,” Bettinger said.
Charles Schwab’s stock has fallen about 30% since the crisis began, but it was the stock most bought by the bank’s clients on Friday, he said, adding 50,000 shares on Tuesday for personal accounts. added that he had purchased the
Contagion fears have spread to other regional banks and Charles Schwab, but Bettinger said the firm’s brokerage and banking operations are separate, both well-capitalized.
On the bank side, he characterizes Schwab as conservatively managed, with 10% of customer deposits invested in low-risk oversecured loans and the remaining 80% in bonds backed by the U.S. government. I outlined that there are
He added that Schwab’s 12-month liquidity level equates to almost all of its banking deposits, or about $280 billion. Also, more than 80% of his deposits are covered by his $250,000 threshold in his FDIC.
“When our stock price fell at a rate that was in a way consistent with some regional banks, people easily put us on the slide and talked about us in a way that was consistent with some regional banks. We understand that it’s a completely different model,” Bettinger said.