- Net interest income (The difference between what banks earn on their assets and the payout on their deposits) dropped from the fourth quarter to the first quarter. It is 4% lower net interest income for JPMorgan, Wells Fargo, and 2% lower for Citigroup.
- "Depositors are seeking out higher yields, as they have at smaller banks, and moving their money into products such as certificates of deposits where JPMorgan has to pay a higher rate."
- Some smaller banks have Savings APY as high as 460X that of the bigger banks.
- JPMorgan's overall profits are still up by 6% from a year ago and beat Wall Street expectations with "Many economic indicators continue to be favorable" as noted by JPMorgan's CEO.
- When asked about the prospect of rates remaining higher for longer, JPMorgan CEO stated, "If it is because of stagflation that's obviously negative. If it’s because of, you know, healthy growth, that's actually pretty good."
- It will be interesting to see the Q1 earnings and member growth from smaller banks with high-yield savings/checking accounts as a significant amount of deposits have shifted to these banks.
https://finance.yahoo.com/news/high-interest-rates-are-getting-more-challenging-for-even-the-biggest-banks-111518014.html
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