Q3 2014 U.S. Banking Roundup: Deposits

While a steady growth in deposits is expected over time and is essential to ensure low-cost funds for the banks, this exceptionally high growth rate has actually been a problem for them. This is because banks have had to incur much higher interest expenses on deposits over the period - exacerbating the problem of shrinking net interest margins across the industry. While it can be argued that the banks also generate several fee-based revenues from their deposit services, the growth in these reven...