Charles Schwab Corp.: Uneventful in Texas, Unimpressed with crypto & cash models; Maintain U/P

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Charles Schwab Corp.: Uneventful in Texas, Unimpressed with crypto & cash models; Maintain U/P

iQprofile SM Charles Schwab Corp.

Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(US$ Millions) Asset Management

Net Revenues 19,606 23,921 27,197 29,402 31,396

Compensation & Benefits NA NA NA NA NA

% of Net Revenue 0% 0% 0% 0% 0% Company Description Non-Compensation Expenses NA NA NA NA NA

Net Income to Ordinary Shareholders 5,478 8,417 10,179 11,173 12,025 SCHW is a financial services firm that services retail and RIA

customers directly through its online brokerage and

institutional services platform. The company also operates

Balance Sheet Data (Dec) a number of other businesses including a bank, asset

(US$ Millions) 2024A 2025A 2026E 2027E 2028E management and custody businesses. Collectively, it

Total Assets 479,843 490,995 519,078 527,949 550,565 manages over $10Tn in total client assets.

Deposits NA NA NA NA NA

Long Term Debt 22,428 22,199 20,486 20,486 20,486

Total Equity 48,375 49,425 55,359 64,162 73,659 Investment Rationale

We maintain our Underperform as we look for secular and

Sector Metrics (Dec) cyclical pressure to NNAs from demographics and an

(US$ Millions) 2024A 2025A 2026E 2027E 2028E increasingly less competitive product offering (0.01% cash

DARTs NA NA NA NA NA sweep rate) and lack of other capabilities that younger

Net Interest Margin NA NA NA NA NA investors crave (digital assets, prediction markets). LT, we

Interest Earning Assets NA NA NA NA NA are also concerned with SCHW's monetization model which

Net New Assets NA NA NA NA NA relies on lazy client cash behavior which will be disrupted by

Growth NA NA NA NA NA

new technologies (blockchain, AI) and more aggressive Total Client Assets NA NA NA NA NA