Retail Deposits Grow as Business Deposits Fall
Ninety cents of every bank deposit dollar now comes from retail consumers.
That discovery is according to research firm Market Rates Insight, which found that retail deposits increased from 83% of all domestic deposits in 2008 to 90% as of June 2011.
On the other end of the spectrum, business and wholesale deposits decreased from 17% of domestic deposits in June of 2008 to 10% in June of this year.
In dollar amounts, retail consumer deposits grow from $5,840 billion in June of 2008 to $7,407 billion in June of this year while business and wholesale deposits decreased from $1.189 trillion in June of 2008 to $819 billion for the same period.
The amount of retail deposits would have been higher and wholesale deposits lower but for a change in the FDIC classification of retail deposits in March 2010, which excludes brokered deposits from the retail category, according to MRI.
“The shift towards a higher percentage of retail deposits is by design,” said Dan Geller, executive vice president at MRI. “[It] lowers liquidity vulnerable by reducing the risk of large withdrawals by businesses or wholesale depositors, and it provides opportunities for closer relationship with individual consumers, which promotes greater loyalty and additional revenue streams.”