Charles Schwab maintains strong capital position after Fed stress test

NEW YORK - Charles Schwab Corporation (NYSE:SCHW), a $165.7 billion financial services giant with a perfect Piotroski Score of 9, announced Tuesday that its stress capital buffer (SCB) will remain at the 2.5% minimum floor following the Federal Reserve’s 2025 Comprehensive Capital Analysis and Review (CCAR). According to InvestingPro analysis, the company maintains strong financial health metrics, reflecting its robust business model.

The financial services provider’s calculated SCB fell below the 2.5% regulatory minimum, reflecting the company’s low-risk balance sheet. The buffer will apply for the four-quarter period beginning October 1, 2025.

Schwab reported a Common Equity Tier 1 (CET1) ratio of 32% as of March 31, 2025, significantly exceeding the regulatory minimum of 4.5% combined with the required SCB. The company also ended the first quarter with a consolidated adjusted Tier 1 Leverage Ratio of 7.13%, up from 6.85% at year-end 2024 and above its long-term operating objective of 6.75% to 7.00%.

"Schwab’s CCAR stress test results reinforce the strength of our capital position and durability of our diversified model across a range of environments," said CFO Mike Verdeschi in the press release statement.

The stress test evaluated Schwab’s minimum capital ratios under the supervisory severely adverse scenario for a nine-quarter period from December 31, 2024, through March 31, 2027.

As of May 31, 2025, Charles Schwab managed $10.35 trillion in client assets across 37.4 million active brokerage accounts, 5.6 million workplace plan participant accounts, and 2.1 million banking accounts.

In other recent news, Charles Schwab Corporation reported a record $35 billion in core net new assets for May 2025, marking a 13% increase compared to May 2024. This achievement pushed total client assets to $10.35 trillion, a 12% rise from the previous year. The company also opened 336,000 new brokerage accounts, a 7% increase from the same period last year. Meanwhile, Truist Securities raised its price target for Charles Schwab to $100, maintaining a Buy rating, following the company’s May data release. Redburn-Atlantic analysts upgraded Charles Schwab from Sell to Neutral, increasing the price target to $82, citing the firm’s strong position in the U.S. retail wealth management market. Additionally, TD Cowen’s analyst Bill Katz raised the 12-month price target to $113, highlighting Schwab’s organic growth and balance sheet strategy. In corporate developments, Charles Schwab filed a Certificate of Elimination for its Series G Preferred Stock with the Secretary of State of Delaware. These recent developments reflect a dynamic period for Charles Schwab, marked by strategic upgrades and significant asset growth.

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