KeyCorp's Deposit Franchise Is Outperforming Its Peer Group
Deposits are front and center right now for most banks. Over the last year, the Federal Reserve has raised its benchmark overnight lending rate, the federal funds rate, above 4.5%, putting many banks in uncharted waters.
Deposit costs, which rise on a lag, started to move up significantly in the fourth quarter and are expected to continue to see pressure in the quarters ahead. The Fed is also pulling liquidity out of the economy through quantitative tightening, which is draining deposits from the banking system. Banks have seen large deposit outflows, largely in lower-cost deposit products.
The large regional lender KeyCorp (NYSE: KEY) has so far outperformed most of its regional peer group on deposit costs, which could be a material advantage if it can continue to do so this year.
Source Fool.com
