2023-04-24 05:10:00 ET
In the first quarter of the year, deposits were more important than usual because the banking system as a whole saw customers move their cheaper (and what were supposed to be stickier) deposits into risk-free U.S. Treasury bills and higher-yielding bank account products. As a result, some banks in the U.S. collapsed after large-scale deposit runs during the banking crisis in March, although there were other reasons that led to their demise aside from just higher deposit costs.
But given the turmoil in the industry and the pressure on outflows and higher costs, investors were intensely focused on deposits as bank earnings season kicked off. With the big four money-center banks -- namely, JPMorgan Chase (NYSE: JPM) , Bank of America (NYSE: BAC) , Citigroup (NYSE: C) , and Wells Fargo (NYSE: WFC) -- all having reported first-quarter earnings, let's take a look at which deposit franchise performed the best during the first quarter and the banking crisis in March.
The big thing that investors were focusing on in Q1 is deposit outflows, specifically among cheaper deposits, and what kind of funding sources banks had to replace these deposit outflows with. Investors also concentrated on how much deposit costs, which have a big impact on bank profitability, ultimately rose in the first quarter.
For further details see:
Which Large Bank's Deposit Base Performed the Best During the Banking Crisis?