Depositors have now pulled $1.5 trillion from big banks globally according to the latest data compiled by S&P Global Market Intelligence and the Federal Reserve.
“According to a report from the Federal Reserve of St Louis, US banks have faced $605 billion in deposit flight in a year,” reports DH.
“And total deposits at banks in France, Germany, Spain and Italy as well as in the Benelux and Nordic regions dropped by about $950 billion in 12 months, bringing the grand total across the aforementioned countries to $1.55 trillion in deposit flight.
As customers pull money out of their banks in search of higher returns, wealthy clients are now doing the most damage to the bottom lines of America’s banking giants, according to a new report from Yahoo Finance.”
New stats from the Federal Reserve Economic Data (FRED) system show that $48.81 billion in deposits exited American bank accounts in just one week alone last month.
In early August, it was reported that 25 of the largest US banks saw a record plunge of $174 billion in deposits, per FRED data.
The massive drop in deposits comes as money market funds record the largest level of inflows in six weeks as investors look for more stable returns.
Data from Refinitiv Lipper shows investors recently made $32.29 billion worth of purchases in money market funds in one week, per Reuters.
JPMorgan Chase, Wells Fargo, Bank of America and Citi all reported deposit outflows in their wealth management divisions in the second quarter of this year.
This summer, all four banks launched new offers for certificate of deposit (CD) savings accounts in a push to remain competitive with money-market accounts.
Other Bank News Today
Wells Fargo is now speaking on its new painful branch closures this year as the bank prepares to shut down three new locations.
The bank announced the closure of two banks in Virginia and one in Pennsylvania on Thursday.
It comes after the bank, which has over 4,000 branches across the country, has filed for over 100 branch closures this year, according to the Office of the Comptroller of the Currency.
In August, Journal Now reported that Wells Fargo is expected to close another 23 branches this year.
The two Virginia branches closing are in Richmond and Charlottesville.
The Richmond branch, located downtown in the city’s Monroe Ward, is set to close on November 1 at noon.
Customers will still have access to their funds through other locations and be able to manage their online banking without interruption.
“The closure of the Monroe Ward branch makes it the ninth Wells Fargo location in Richmond to close in the last few years, including two that will close on October 18,” reports TheSun.
Changes in consumer trends have been blamed for the widespread closures, primarily due to the heavy switch to online banking-only usage.
In an emailed statement the bank said: “This is not an easy decision or one we take lightly.
“Branches continue to play an important role in the way we serve our customers, and we continuously evaluate our branch network in light of changing customer needs, the increase in the use of digital banking, and market factors.”
The Charlottesville location will also close on November 1, leaving just two remaining Wells Fargo banks in the region.
Bank of America has also stated many branches will now permanently close soon in due to the rapid popularity of online banking.
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