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With Consumers Transferring Money To The Biggest U.S. Bank, JPMorgan Accrues Huge Deposits

With Consumers Transferring Money To The Biggest U.S. Bank, JPMorgan Accrues Huge Deposits
Due to the sudden failure of two U.S. regional banks in March, consumers moved their money to larger lenders, which led to a rise in deposits for JPMorgan Chase & Co.
According to the largest U.S. lender's first-quarter earnings report, deposits increased by $50 billion at the end of March. That contrasts with a drop at Wells Fargo & Co. and deposits that were basically steady at Citigroup Inc.
Jeremy Barnum, the head of finance at JPMorgan, predicted that deposit outflows will be moderate for the remainder of the year.
Analysts examine bank balance sheets to determine whether they have enough room to absorb any financial shocks and how readily lenders can fund their operations.
"Investors are scrutinizing various aspects of bank deposit bases to assess funding profiles, net interest margin (NIM) pressures and overall liquidity," Autonomous Research analysts led by John McDonald wrote in a March note.
After the bankruptcies of Silicon Valley Bank and Signature Bank last month shook the markets and forced authorities to intervene to guarantee their customers' accounts, investors have been closely scrutinizing deposits.
March saw a large inflow of cash for the three industry titans in banking. According to JPMorgan, deposits increased by 2% to $2.38 trillion at the end of the quarter from the end of 2022.
Although Citigroup's deposits were essentially unchanged at $1.33 trillion at the end of the first quarter, CFO Mark Mason said it experienced a "meaningful deposit inflow" as a result of the upheaval.
In response to clients moving their money to higher-yielding accounts and products, Wells Fargo's deposits fell 2% to $1.36 trillion.
Inflation and a potential recession are projected to cause a drop in consumer deposits across the board during the coming months, according to Stephen Beck, founder and managing partner of the New York consulting firm cg42. Beck made this statement in an email on Friday.

Christopher J. Mitchell

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