U.S. Bank Deposits Rise After 10 Weeks Of Declines; JPMorgan Kicks Off Bank Earnings

After 10 weeks of decline, US bank deposits rise again, led by small banks. JPMorgan begins bank earnings Friday.

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May 5, 2023 • 2 min read

Federal Reserve's delayed H.8 report announced on Friday that U.S. deposits had increased for the first time since 11 weeks. The Federal Reserve announced Friday that lending conditions have eased for the first three weeks. This indicates credit conditions are stabilizing following the March panic. JPMorgan (JPM), and Wells Fargo(WFC), both of which released their quarterly bank results on Friday morning, easily exceeded earnings expectations.

The Fed reported Friday that U.S. commercial banks' deposits increased by $60.7 billion, to $17.251 trillion, for the week ending on April 5. The deposits fell by $64.7 billion in the previous 10 weeks, the Fed announced Friday.

Deposits at domestic chartered banks increased by $44.7 billion. The deposits of small banks increased by $23.6 billion over the past week after deposit growth was $1.5 billion last week. The 25 largest banks in the United States increased their deposits by $21.1 billion over the past week.

The previous Fed announcement showed that domestic bank deposits dropped by $38.3 Billion.

Last week, total lending increased by $10,2 billion, the first rise in three weeks. Large banks led the increase with a $13,1 billion increase. The U.S. foreign institutions decreased their lending by $6 billion in the last week.

The total borrowing dropped by $94.7 billion, mainly due to major cuts made at the domestic banks. The borrowing of large banks was reduced by $39.1billion, while that of small businesses by $22.2billion.

Cash assets of small banks decreased by $38.3 Billion, but this was offset by an increase of $14.3 Billion at large institutions. The overall bank credit increased, with large domestic banks leading the way.

The total bank provision for losses increased for the second consecutive week, rising by $4.8 billion. Banks had set aside an extra $1.1 billion in the previous week for possible losses. Small banks increased their loss reserves by $1.6billion over the past week, after decreasing provisions by $400m last week.

Bank of America, Goldman Sachs, Morgan Stanley and Charles Schwab all report their earnings next week.

Also, superregionals Comerica(CMA), U.S. Bancorp(USB), Regions Financial(RF), Truist Financial TFC and KeyCorp (KEY) will be reporting. Western Alliance Bancorp, based in Phoenix, will also report.

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