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Banks Might Benefit from the Improving Loan-to-Deposit Ratio

Peter Barnes
Banks Might Benefit from the Improving Loan-to-Deposit Ratio

The LDR (loan-to-deposit) ratio for the largest US banks—JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), and U.S. Bancorp (USB)—rose in the first quarter. The ratio has been declining steadily since 2011 and only bucked the trend in the first quarter of this year. The ratios for five largest US banks range from 64% for JPMorgan Chase to 84% for U.S. Bancorp. The improving LDR ratio should boost banks’ (VFH) interest revenues in subsequent quarters.