S&P Raises Schwab (SCHW) Outlook After Strong Earnings and Better Interest-Rate Risk Controls

The Charles Schwab Corporation (NYSE:SCHW) ranks among the best financial stocks to buy according to billionaire Ken Fisher. S&P Global Ratings maintained its “A-/A-2” issuer credit ratings on October 31 while altering its outlook for The Charles Schwab Corporation (NYSE:SCHW) from stable to positive. According to the ratings firm, Schwab’s unrealized securities losses have significantly decreased, adjusted regulatory capital ratios have sharply increased, and interest-rate risk and balance-sheet volatility have been handled more effectively.

By employing derivatives to shorten the term of its securities portfolio, The Charles Schwab Corporation (NYSE:SCHW) has improved interest-rate risk management. The length of securities that were available for sale was reduced from 2.4 years at the end of 2022 to 2 years as of June 2025.

The rating agency’s coverage follows Charles Schwab’s third-quarter earnings report, which showed a 27% year-over-year increase in quarterly net revenues to a record $6.1 billion. Net interest margin, on the other hand, grew sequentially by 21 basis points to 2.86% as a result of strong securities lending activity and further reduction of higher cost liabilities.

Assuming The Charles Schwab Corporation (NYSE:SCHW) maintains strong capitalization and performance while managing its balance-sheet and interest-rate risks, S&P may upgrade its ratings over the coming two years.

The Charles Schwab Corporation (NYSE:SCHW) is a leading U.S.-based brokerage and wealth management firm. It provides trading, advisory, banking, and custodial services to individual investors and independent advisors.

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Disclosure: None. This article is originally published at Insider Monkey.