Bank deposit growth trends

American Banker (, subscription needed to access) recently published end-second quarter 2010 deposit data for the top 200 bank holding companies in the U.S.  These top 200 banks grew deposits by 2.9% between 2Q09 and 2Q10.  This growth rate represents a slowdown relative to recent quarters, as many banks’ need to aggressively grow deposits as a funding source has abated (loan-to-deposit ratios have fallen below 100% and loan demand is expected to remain relatively anemic).  The top 10 banks grew deposits by 1.7%.

What is most notable in the data in the continued strong deposits growth rates for leading direct (branchless) banks, including:

  • ING Direct: 17th largest bank by deposits; 4%year-over-year growth
  • Charles Schwab: 25th largest bank; 43%growth
  • USAA: 31st largest bank; 17%growth
  • Discover: 33rd largest bank; 19% growth
  • American Express: 34th largest bank; 29%growth
  • Ally Financial: 35th largest bank; 31%growth
  • MetLife: 69th largest bank; 25%growth
  • Scottrade Bank: 105th largest bank; 71%growth

Big banks winning larger share of deposits

The FDIC recently published U.S. deposit data for the period ended June 30, 2010. Two quick takeaways:

  1. Deposit growth slowed significantly over the past year.  Following the financial crisis in the second half of 2008, U.S. consumers ramped up their savings rates, and banks competed aggressively for these deposits.  As a result, U.S. deposits grew 7.6% between end-June 2008 and end-June 2009.  Over the past year, competition for deposits has declined, as many banks’ loan-to-deposit ratios fell below 100%, and banks’ need to grow deposits as a funding source abated.  The growth rate for deposits in the year to end-June 2010 was 1.5%.
  2. Due to bank consolidation, a flight to safety, and a re-emphasis on relationship banking, larger banks have grown deposits at a stronger rate than the industry average.  The top 50 U.S. banks increassed deposits  by 4.4% in the year to end-June 2010, compared to 1.5% for all banks.  The top 50 banks’ share of total deposits rose from 57% in 2007 to 63% in 2010.