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That quote above is from a comment posted to a startling The Wall Street Journal story last week – "Biggest Three Banks Gobble Up $2.4 Trillion in New Deposits Since Crisis" – reporting domestic deposits held by JPMorgan Chase, Bank of America, and Wells Fargo soared 180% over the last 10 years.
With $3.8 trillion in U.S. deposits, or 32% of the market, those three banks opened 45% of new checking accounts last year despite the fact that they operate only a quarter of U.S. branches.
Younger customers are flocking to the biggest banks for their perceived technological advantage, providing cheap funding that allows these giants to make more loans, the Journal reported. Losing deposits to the biggest banks, said Second Curve Capital CEO Tom Brown, may translate into slower loan growth and lower fee income for community banks. Brown closes the story by saying the risk for small banks "is a slow death."
On that happy note, what's your reaction to this story? Are things that bad in your market? Are large banks stealing deposit share?
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Barb Rehm
Promontory Interfinancial Network
Arlington VA
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