dChan - Q Origins Project Archive

Big US banks expected to report deposit flight in upcoming earnings

(This would be MUCH worse had they not done SVB when they did-3 weeks until the end of Q1…no coincidences here)

The largest US banks are expected to reveal this week that customers withdrew tens of billions of dollars in deposits at the start of 2023, even as they gained new customers following the collapse of Silicon Valley Bank. Analysts are forecasting that depositors seeking higher returns from alternatives like money market funds pulled almost $US100 billion ($150 billion) in aggregate from JPMorgan, Bank of America, Citi and Wells Fargo in the first three months of 2023, according to consensus data compiled by Bloomberg. If correct, it would come despite the failures of SVB and Signature Bank in March, which sparked customers to move deposits from smaller regional banks into bigger ones. Deposits are typically banks’ cheapest source of funding and a reduction could constrain lending. The big banks have steadily been losing deposits for the past 12 months as the Federal Reserve has raised rates.

“The number one, two or three things to watch this quarter are deposits, deposits, deposits,” said Jason Goldberg, research analyst at Barclays. JPMorgan, Citi and Wells Fargo report earnings on Friday, followed by Bank of America on April 18. Goldman Sachs and Morgan Stanley, which have businesses that skew more towards investment banking, trading and asset management, report earnings on April 18 and 19, respectively. On average, first-quarter revenues at the six big US banks are expected to rise just over 6 per cent year on year while earnings per share are expected to increase by just over 1 per cent, according to Bloomberg estimates. Before the collapse of SVB and Signature, deposits had been flowing out of the banking system and into higher-yielding assets like money market funds because many banks were not passing on significantly higher rates to depositors.

This boosted profit margins from lending but withdrawals put pressure on banks to lift their so-called “deposit betas”, which measure how much of any rise in interest rates lenders expect to pass on to customers.

https://www.ft.com/content/4b8ed13a-e4c5-40a5-b15e-afa73e74dd10

This is why the New York Federal Reserve needs to stop the Reverse Repo Facility….those money market funds deposit over $2T a night at 4.80% but you don't see that much of it

https://www.newyorkfed.org/markets/desk-operations/reverse-repo

Which will sky all the bank stocks (they've done very well getting most of this back ever since the March 10th SVB runs)

and in Bank of ~~America~~ Italy news

Bank of America clients withdraw $2.3B from US securities

Bank recorded biggest real estate outflows since mid-2021

Bank of America clients sold around $2.3 billion in U.S. equities last week, according to a note from bank strategist Jill Carey Hall on Tuesday. Although the note failed to highlight reasons for the withdrawal, data compiled by Bank of America showed clients sold both single stocks and ETFs for the second consecutive week, while selling was broad-based across client groups including institutional, hedge funds, retail, and size segments. Amid concerns over commercial real estate, the bank recorded the biggest real estate outflows since mid-2021.

Meanwhile, exchange-traded funds (ETFs) posted their biggest outflow since January across all styles including growth, value, and blend and across small, mid, and large cap ETFs. The bank said buybacks accelerated as client repurchases gained steam and were slightly above seasonal trends for the first time in ten weeks. Buybacks typically accelerate over the subsequent six weeks after earnings season begins, according to Hall’s note.

The bank also said it expects no net contribution to earnings per share from buybacks this year. (not from that but any munee you set aside for failed loans that you don't use will go right back onto the balance sheet as earned income-a trick they have all used for years)

https://www.foxbusiness.com/markets/bank-america-clients-withdraw-2-3b-u-s-securities

Since BofA rec'd something like $15B of those deposit inflows on just the monday after the SVB 'failure' the above is moar about flows than anything else..not a coincidence they did this with SVB three weeks before the close of the Qtr so that all the big banks can show very large depositor base increases as a result of people thinking their munee is safer at those places