The US banking industry’s total deposits declined year-over-year for the first time in data going back to 1994 following a tumultuous period for the banking sector.
(Bloomberg) — The US banking industry’s total deposits declined year-over-year for the first time in data going back to 1994 following a tumultuous period for the banking sector.
Total deposits at US banks ended the year around $17.3 trillion, a 4.8% decrease from the prior period ending June 30, S&P Global Market Intelligence said in a report published Tuesday. S&P’s findings are based on an annual survey conducted by the Federal Deposit Insurance Corp. The latest survey results were published last week.
S&P’s analysis demonstrates the magnitude of bank outflows this year as higher interest rates incentivized depositors to pull cash out of checking or savings accounts and place them in higher-yielding alternatives. A series of bank failures touched off by the rate environment motivated further withdrawals.
Charles Schwab Corp. reported the largest decrease, primarily due to outflows from brokerage accounts. Schwab’s deposits fell 31.1% to $304.79 billion, S&P said in the report. Higher rates likely spurred some Schwab clients to move money from the bank to its other investment products, such as money-market funds.
Bank of Montreal’s deposits gained the most thanks to its acquisition of Bank of the West, a deal completed earlier this year that brought deposits at the firm to $202.24 billion.
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