Jul 14, 2023 - Economy & Business

Big bank deposits fall amid higher interest rates

Illustration: Annelise Capossela/Axios

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.

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