Large Banks See Surge in Retail Investments, Deposits After SVB Collapse

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As retail customers move their deposits to larger U.S. banks to avoid tumult in regional banks, they're taking their investments with them.

Key Takeaways

  • The largest U.S. banking firms have seen a surge in retail inflows in the backdrop of tumult in regional bank shares
  • Bank of America, Charles Schwab, Citigroup are top banking stocks with retail investor buys
  • Retail customers are also moving their deposits to larger banks as regional bank worries spread

Retail investors bought financial stocks at "unprecedented" levels in the backdrop of a rout in shares of regional banks, according to investing data provider VandaTrack. Retail investors have piled almost a billion dollars in net stock investments into large banks in the last five trading days, VandaTrack's data show.

In the five days ending March 16, Bank of America (BAC) received about $232 million of retail net stock buys, Charles Schwab (SCHW) got $146 million, Citigroup (C) about $54 million and JP Morgan (JPM) netted $49 million. U.S. Bankcorp (USB) saw about $44 million in retail investment and Wells Fargo (WFC) had $41 million in stock buys.

Some of these banks were instrumental in providing a $30 billion liquidity rescue for First Republic Bank (FRC) Thursday, and have benefitted from customers' shaken confidence in regional banks.

Bloomberg said on Monday that "too-big-to-fail" banks had seen a sharp increase in customer deposits. Bank of America was said to have taken in more than $15 billion in deposits as the dust settled on the collapse of Silicon Valley Bank and contagion had spread to other regional banks.

Inflows into Charles Schwab paint an interesting picture. The brokerage firm saw its share price plunge and trading halted on Monday as fear spread among investors, however, it assured stockholders that 80% of its deposits sit within the FDIC insurance limits.

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  1. Bloomberg. "JP Morgan Chase, BofA, Citigroup Rake in Deposits".

  2. Charles Schwab. "Schwab Reports Monthly Activity Highlights."

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