Bank of America raises $15 BILLION as panicked customers abandon smaller lenders for ‘too big to fail’ companies in wake of SVB crisis, with ‘goliaths’ like JP Morgan also ‘winning’, they say the analysts
- Nervous clients flock to major banks after SVB collapse
- One analyst said “Goliath is winning” as some speed up their onboarding process to cope with new demand.
- It comes as SVB’s spectacular fall from grace continues to wreak havoc on Wall Street.
Bank of America has reportedly raised $15 million in new deposits as customers flee small lenders for “too big to fail” companies in the wake of Silicon Valley Bank’s collapse.
So-called ‘goliath’ banks like JP Morgan and Wells Fargo are being inundated with applications, and some are taking steps to speed up the onboarding process.
It comes as SVB’s spectacular fall from grace continues to wreak havoc on the US stock market, which has been exacerbated by the ongoing turmoil at Credit Suisse.
On Monday, Wells Fargo banking analyst Mike Mayo wrote in a research note: “Goliath is winning.” He then pointed to JPMorgan as the biggest beneficiary in “these less secure times.”
Wells Fargo analyst Mike Mayo said “Goliath is winning” in a research note Monday. The note was a reference to swathes of clients seeking “too big to fail” banks like JP Morgan.
JPMorgan is one of several ‘too big to fail’ banks benefiting from an influx of new clients
Meanwhile, another senior bank executive told the Financial times: The calls have been pouring in today like planes stacked up on a snowy day at O’Hare airport.
The insiders also said Bloomberg that about $15 billion has been deposited at Bank of America alone.
The bank told dailymail.com it would not comment on the figure and that the deposit numbers were only released during its earnings reports.
JPMorgan has reportedly shortened the wait time to open an account and is speeding up the time it takes for new corporate clients to access funds so they can pay staff at the end of the week, the Financial Times reports.
Citizens Financial Group also said it had “observed above-normal interest from potential new clients in recent days.”
It added that it was temporarily extending branch hours as a result, according to Bloomberg.
It comes after panic rocked markets last Friday following the collapse of SVB, making it the biggest drop since the 2008 financial crisis.
The firm was run by CEO Greg Becker, who previously lobbied Congress to relax regulations around businesses like his.
It left clients facing heavy losses as only deposits up to $250,000 could be recovered under the Federal Deposit Insurance Corporation (FDIC).
Desperate customers were photographed queuing outside SVB branches last Friday in a desperate attempt to withdraw all their money.
And police were even called to an SVB building on Park Avenue after around a dozen financiers turned up to stage a protest against the embattled bank.
The defunct bank was led by CEO Greg Becker, who had previously lobbied Congress to relax regulations on companies like his.
Financiers, including former Lyft executive Dor Levi, showed up in front of the Park Avenue building to protest its collapse last Friday.
Many corporate clients were unable to pay their customers and even sellers on the Etsy online marketplace were unable to access payments.
However, there was quiet over the weekend as federal regulators laid out a plan to support $175 billion in deposits.
President Biden has repeatedly insisted that taxpayers will not pay the bailout.
But the debacle has shed light on the risk of customers keeping all their money in one bank.
A private banker told the financial times: ‘Clients are like… Lesson learned, I’m not just diversifying my portfolio, I want to diversify my bank.’
WhatsNew2Day.com has also reached out to JPMorgan and Wells Fargo for comment.