Charles Schwab (SCHW.US) shares are gaining over 10% marking the most significant intraday gain since July, after reporting third-quarter bank deposits that surpassed analyst expectations. Despite a 28% decline in deposits to $284.4 billion from the previous year, the firm outperformed the average estimate of $268.8 billion. The company's cash-sorting issues, attributed to clients transferring money to higher-yielding products due to elevated interest rates, are showing signs of slowing down. Schwab's net revenues decreased by 16% to $4.6 billion from the previous year, slightly below analysts' expectations. However, the firm remains optimistic, highlighting potential gains from elevated rates and its range of variable-rate products. Additionally, Schwab is focusing on increased automation, anticipating at least $1 billion in annual expense savings once fully implemented. The company also introduced a revamped trading platform, emphasizing its commitment to enhancing its trading services.
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The bank's shares rebounded from the psychological resistance level of 50 dollars per share after announcing the results. Although the results are not fantastic, investors breathed a sigh of relief upon the information that the bank improved its liquidity ratios, reported a higher level of deposits, and has a positive outlook for the upcoming quarters.
Source: xStation 5
