Biggest U.S. Banks Pile Into Cash, Securities as Loans Fall

The four largest U.S. banks gathered $919 billion in additional deposits last year, money that they either parked in cash or used to increase their holdings of securities, new data show.

Deposits at JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. collectively grew by 15% to $6.9 trillion as of March 31, the banks reported last week. Their combined loan holdings fell 10% to $3.44 trillion. Trading assets and other securities increased 24% to $3.67 trillion. Cash surged by 56% to $1.65 trillion.

The changes in their books mirror the broader U.S. banking system, where cash and securities holdings jumped by more than deposits as loans fell, Federal Reserve data show.

That trend continued in the first week of April to start the year’s second quarter, according to the Fed’s latest weekly survey. Some highlights of banks’ holdings:

  • The share of safe assets -- virtually risk-free investments such as cash, Treasuries and securities effectively guaranteed by the U.S. government -- rose to 36.3% in the week ended April 7 from 35.6% the previous week.
  • Total assets ticked up 2% to $21.25 trillion. The bulk of the increase was in cash, which rose 8% to $3.77 trillion.
  • Total loans and leases fell again to a record low as a share of deposits. The loans-to-deposits ratio now sits at 61.5% for all banks in the U.S., the lowest ratio in 48 years of weekly data. At the 25 biggest U.S. banks the ratio is 53.7%, the lowest figure in 36 years of weekly Fed data.
Biggest U.S. Banks Pile Into Cash, Securities as Loans Fall

The Fed also reported the assets of large, small and foreign-related U.S. lenders. Here’s how their balance sheets compare on selected parameters:

Biggest U.S. Banks Pile Into Cash, Securities as Loans Fall

Here’s how big banks’ balance sheets have changed since the Fed’s previous weekly report:

Balance Sheet ItemThis Week, $ BnPrev Week, $ Bn% of Total Assets, Latest Week% of Total Assets, Year Before% pt Change from 5Y Avg
Cash19121839.815.711.24.4
Agency Mortgage-Backed Securities1964.81968.416.114.32.1
Residential Real Estate Loans1403.81400.111.513.1-3.1
Commercial Real Estate Loans750.9749.76.26.7-1.1
Consumer Loans1078.31079.98.89.8-1.5
Commercial and Industrial Loans1290.31282.710.614-2

Here’s how smaller and foreign-related banks’ balance sheets have changed since the previous report:

Balance Sheet ItemThis Week, $ BnPrev Week, $ Bn% of Total Assets, Latest Week% of Total Assets, Year Before% pt Change from 5Y Avg
Cash1855.61654.820.517.34.5
Agency Mortgage-Backed Securities726.1737.2870.9
Residential Real Estate Loans822.9818.79.19.8-1.1
Commercial Real Estate Loans1664.41665.818.419-1.2
Consumer Loans458.3459.55.15.5-0.6
Commercial and Industrial Loans1287.51283.914.214.90.1

©2021 Bloomberg L.P.

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