Big bank deposits fall amid higher interest rates
The biggest banks in the U.S. have emerged relatively unscathed from a tumultuous start to the year.
Driving the news: JPMorgan, Wells Fargo and Citigroup kicked off earnings season Friday morning with results that beat expectations.
- But they also were not immune to the effects of higher interest rates that led to the unraveling of Silicon Valley Bank, Signature Bank and First Republic.
- Banks have had to pay higher rates to keep deposits from moving to higher-yielding Treasurys and money-market funds.
By the numbers: JPMorgan saw a 1% increase in deposits from the previous quarter, excluding its First Republic business, and an 8% decline from last year.
- Wells Fargo deposits fell 1% from Q1 and 7% from a year ago.
- Citigroup deposits have remained roughly flat.
- Meanwhile, the average interest rates they’ve had to pay on deposits have moved up to 1%–3%, from “next to nothing” a year ago, WSJ notes.
The big picture: Among big banks, deposit levels have fallen for more than a year — with the annual growth rate turning negative last fall and hitting its lowest-ever level of -6% in April.
What to watch: Bank of America and Morgan Stanley report on Tuesday.
- Goldman Sachs is due to report on Wednesday.