The largest banks in the United States are about to announce how they did during the first quarter of this year.
Customer deposits at JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp are expected to have fallen $521 billion from a year earlier, the biggest drop in a decade, according to analyst estimates.
The decline, which includes a $61 billion drop in the first quarter alone, comes as a late inflow of cash after the crisis failed to offset the steady flight of customers to products offering higher rates.
“By far the biggest problem for banks has to do with deposits, both for the quarter and for March,” Mike Mayo, an analyst at Wells Fargo & Co., said in an interview. “Not responding only makes things worse.”
Western Alliance Bancorp learned that lesson the hard way last week, when it released financial updates that omitted data on deposit levels.
The company's shares fell, until it later released deposit data that was better than some analysts had feared.
For smaller competitors like Western Alliance, the problem is twofold: Their customers also want more for their money, and the recent collapse of three regional lenders has sparked jitters among consumers, prompting them to withdraw their cash and store it in larger banks. big.
The turmoil has also weighed on bank stocks.
The KBW banking index is down 19% this year and lost 25% in March alone.
Regional banks were the biggest losers in the period, with First Republic Bank down 89%.
The upcoming first-quarter disclosures from the biggest banks could intensify concerns about the deposit mix and, if lenders fail to meet expectations, trigger more inquiries about the health and future of the industry.
Despite recent volatility, the banks themselves warned that trading revenue was likely to fall in the first three months of the year compared to a year earlier, when the Russian invasion of Ukraine rattled markets and spurred trading activity. the clients.
For the five largest Wall Street banks — a group that includes JPMorgan, Bank of America, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley — total trading revenue is forecast to fall $3.2 billion, or 10 %, to US$29.9 billion.
(Taken from Profile)
(Taken from Profile)