Wall Street banks have an unlikely ally channeling cash to their balance sheets at a crucial time: the American consumer.
When the biggest consumer banks in the U.S. began 2016, it was with rosy optimism that the Federal Reserve would raise interest rates two, three, even four times. But a turbulent start to the year dashed those hopes.
U.S. consumer deposits are on the rise, banks JPMorgan Chase, Wells Fargo and Bank of America reported separately over the last two days in their first-quarter earnings. Although a mere 0.25 percentage point is not all of what Wall Street banks were hoping for, they're still able to reap hundreds of millions in interest payments on what they've got stashed at the Fed. Recent sharp increases in deposits made by consumers only help pad that total.
JPMorgan reported in its earnings Wednesday its largest-ever year-over-year increase in consumer deposits of roughly $40 billion, or a rise of nearly 10 percent.
"We've made some significant investments in the business over the last five years," said Barry Sommers, CEO of JPMorgan's consumer bank. "We've made investments from a technology standpoint; we put the customer first."