Monday, September 29, 2008

Bank Troika USA

Some pro forma numbers for you (based on 6/30/08 FDIC data):

Citigroup + Wachovia ------- $688 billion in domestic deposits
JP Morgan + WaMu ---------- $690 billion in domestic deposits
*Bank of America + Merrill - $840 billion in domestic deposits

Total: ------------------------ $2.218 trillion in domestic deposits

Banking Industry Total: ------ $7.029 trillion in domestic deposits

That would be 32% of domestic deposits in the hands of 3 holding companies.


Citigroup + Wachovia -------- $1.295 trillion in total deposits
JP Morgan + WaMu ---------- $1.027 trillion in total deposits
Bank of America + Merrill ---- $1.022 trillion in total deposits

Total: ------------------------ $3.344 trillion in total deposits

Banking Industry Total: ------ $8.573 trillion in total deposits

That would be 39% of total deposits in the hands of 3 holding companies.

Please note that these numbers may be a bit off since they are 3 months old. However, the implication for the banking public is clear: pricing power is building and the consumer is in more trouble than ever before.

* There is an FDIC statute that prohibits an institution from holding more than 10% of domestic deposits via acquisition. The numbers I used included Countrywide Bank, FSB, which does not roll up into the Bank of America holding company. I will research this.

3 comments:

MK said...

MK here: Because Countrywide Bank, FSB is a thrift, it does not count against the 10% cap. Quite the loophole.

MK said...

The relevant statute is the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

MK said...

The arm's length between the Bank of America holding company and Countrywide Bank, FSB is still in place after the 7/1/08 acquisition closing date.