{"id":17615,"date":"2023-04-20T14:48:52","date_gmt":"2023-04-20T14:48:52","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/fifth-third-bancorp-profit\/"},"modified":"2023-04-20T14:57:57","modified_gmt":"2023-04-20T14:57:57","slug":"us-regional-banks-shares","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/us-regional-banks-shares\/","title":{"rendered":"US regional banks’ shares slip as deposit flight counters higher interest income"},"content":{"rendered":"

By Manya Saini<\/p>\n

(Reuters) – A clutch of U.S. regional lenders on Thursday joined peers in reporting deposit outflows for the first quarter as customers spooked by a banking crisis moved funds to bigger institutions or sought higher yields in money market funds.<\/p>\n

Shares in Fifth Third Bancorp, Comerica, Truist Financial Corp and KeyCorp fell as the deposit flight dampened a jump in the lenders’ interest income from the U.S. Federal Reserve’s aggressive monetary policy tightening through the past year. <\/p>\n

Only Huntington Bancshares Inc managed to grow average total deposits by $472 million from the prior quarter. <\/p>\n

Its shares outperformed the broader sector with a nearly 1% gain in morning trading, while the others fell between 1% and 6%. <\/p>\n

\n

Huntington outperforms with Q1 deposit gains, https:\/\/www.reuters.com\/graphics\/USA-BANKS\/gdvzqbrrjpw\/chart.png<\/p>\n

\n

Executives at Comerica expect a steep decline this year in deposits as the fallout from the turmoil lingers.<\/p>\n

“Our estimated average year-over-year deposit decline of 12% to 14% assumes continued stabilization and reflects the impact from Fed monetary actions that began last year in addition to the first quarter industry events,” Comerica finance head James Herzog said in a post earnings call.<\/p>\n

Meanwhile, Fifth Third executives expected deposits to be stable or grow from the first-quarter average level throughout 2023. <\/p>\n

KeyCorp, in contrast, sees deposits for the full year to be flat to down 2% and net interest income to decline between 1% and 3%. <\/p>\n

Deposit outflows have been at the center of investor concerns after bank runs last month at two mid-sized lenders sparked worries of sector-wide instability. <\/p>\n

In the aftermath, the KBW Regional Banking Index has tumbled 19.4% this year, through last close. <\/p>\n

Wall Street lending titans Bank of America, Citigroup and Wells Fargo and Co also reported deposit declines between 1% and 3% in the quarter as banks remain sluggish in raising rates it pays depositors. <\/p>\n

Clients are expected to extend the shift toward other assets seeking higher returns unless banks boost deposit rates, analysts have said.<\/p>\n

Huntington cut its forecast for net interest income this year as a recession becomes more likely, its chief executive told Reuters on Thursday. <\/p>\n

On Wednesday, Citizens Financial slashed its forecast for net interest income, expecting an increase in the rate it pays out for deposits. <\/p>\n

\n

(Reporting by Manya Saini in Bengaluru and Nupur Anand in New York; Additional reporting by Niket Nishant, Siddarth S and Jaiveer Singh Shekhawat; Editing by Sriraj Kalluvila)<\/p>\n

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By Manya Saini (Reuters) – A clutch of U.S. regional lenders on Thursday joined peers in reporting deposit outflows for the first quarter as customers spooked by a banking crisis moved funds to bigger institutions or sought higher yields in money market funds. Shares in Fifth Third Bancorp, Comerica, Truist Financial Corp and KeyCorp fell […]<\/p>\n","protected":false},"author":8,"featured_media":17616,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[1223],"class_list":["post-17615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3J0GZ-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/17615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=17615"}],"version-history":[{"count":3,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/17615\/revisions"}],"predecessor-version":[{"id":17952,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/17615\/revisions\/17952"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/17616"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=17615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=17615"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=17615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}