5 Bank Stocks That Can Navigate the Challenging Deposit Environment Right Now
It's no secret that the banking sector has come under pressure. Three banks in the U.S. collapsed in March, and the large Swiss bank Credit Suisse got forced into an acquisition by regulators on concerns that the bank might not survive.
One of the big problems is that deposits are funneling out of the banking system. Part of the reason has to do with the realization that banks have lots of uninsured deposits. Another reason is that depositors have woken up to the fact that they can get 4% to 5% by investing in safe short-term U.S. Treasury bills or by putting their money into a certificate of deposit. The U.S. banking system lost more than $125 billion of deposits for the week ending March 22.
These deposit outflows could be quite painful to bank earnings because banks have to replace them with higher-cost funding sources or take other actions that will hurt their profitability. However, all hope is not lost. Here are five banks that can better weather the challenging deposit environment right now.
Source Fool.com
