Schwab The largest publicly traded U.S. brokerage

The largest publicly traded U.S. brokerage reported a third consecutive quarter of year-over-year revenue and profit declines, hit hard by higher interest rates. 

Schwab, founded some 50 years ago, grew from a discount brokerage for Main Street into a personal-finance supermarket that came to rival Wall Street firms as an asset-gathering machine. 

While Schwab cut fees and made less revenue from trading, it minted money sweeping cash from its brokerage customers into bank deposits that paid out little interest. 

When rates were low, it worked well for Schwab. Customers were content keeping their money at the bank when there were few alternatives for better yield.

That business model was put to the test last year

WSJ 22 January 2024

https://www.wsj.com/finance/banking/charles-schwab-2024-outlook-stock-2c63db3e

Fair-market value of Schwab’s held-to-maturity bonds $14.1 billion less than balance-sheet value

https://englundmacro.blogspot.com/2023/03/fair-market-value-of-schwabs-held-to.html