Record-Breaking Dip in US Bank Deposits
In a historic turn of events, the total deposits in US banks have plunged by a striking 2.5% in the first quarter of 2023, according to a report by the Federal Deposit Insurance Corporation (FDIC) published on Wednesday.
Flat Profits Amidst Bank Failures
Simultaneously, the industry witnessed flatlining profits once the impact of two significant bank failures - Silicon Valley Bank and Signature Bank (OTC: SBNY) - were factored in. The FDIC underscored these developments as relatively uncharacteristic for the typically robust sector.
Uninsured Funds Lead to the Decline
The FDIC pointed out that the staggering $472 billion deposit outflows in Q1 primarily comprised uninsured funds. However, in a contrary move, insured deposits experienced an uptick of 2.5% from January to March.
US Banking Industry Remains Resilient
In response to the report, FDIC Chairman Martin Gruenberg affirmed the industry's resilience despite the recent shocks. In a prepared statement, he underscored that the American banking sector is "quite resilient" and poised to weather this challenging phase.