Charles Schwab launches online bank

Alorie Gilbert
Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.

Charles Schwab made its anticipated entry into consumer banking Monday with the launch of Charles Schwab Bank. The San Francisco-based discount brokerage firm, which filed its application for a bank license nearly a year ago, said it received regulatory approval earlier this month. It plans to operate the bank virtually, with checking and savings accounts and home mortgage services handled via the Web, by phone and by mail.

The company's move into banking comes amid a stock market decline, which has led to a dramatic drop-off in stock market trades among its 8 million customers. It reported a 45 percent decline in annual net income on revenue that slid 5 percent last year. It has shed nearly 10,000 jobs over the past three years. Schwab follows rival E*Trade Group, which launched E*Trade Bank in 2000. That unit now has more than $17 billion in assets and accounted for 35 percent of the E*Trade's 2002 revenue.