Banking Turmoil: People seeking 'safer, more well trusted banks', SoFi CEO says
All eyes are currently on First Republic as JPMorgan (JPM) announced its takeover of the regional bank in the aftermath of its nearly 41% drop in deposits for the first quarter. However, on the other side of the tracks, banking sector players such as SoFi Technologies pulled off a better than expected first quarter.
The online lender saw total deposits grow by a record $2.7 billion during the quarter. CEO Anthony Noto told Yahoo Finance Live a portion of reported deposits “is likely due to people looking for safer, more well trusted banks and banking relationships.”
Though not all of SoFi's (SOFI) deposit performance was thanks to banking stresses. CEO Noto told Yahoo Finance's Rachelle Akuffo, SoFi would have seen a "strong quarter for deposits" regardless of the banking turmoil, as it was well on its way past $2.3 billion of deposits.
Key Video Moments
00:00:11 SoFi Q1 Deposits
00:00:29 Trust in banking
Video Transcript
RACHELLE AKUFFO: Looking at your deposits there increasing by $2.7 billion sequentially, another record there. How much do you think SoFi benefited from what we saw with the collapse of those banks?
ANTHONY NOTO: We would have had a really strong quarter for deposits even without the issues that took place. We were well on our way to over $2.3 billion of deposits before the events unfolded in April 9, 10 time period, similar to what we've seen in the prior quarter. So I'd say a portion of what is reported today is likely due to people looking for safer, more well trusted banks and banking relationships.
So without a doubt, we are one of-- we are one of the more trusted brands. Our brand awareness continues to grow. And we continue to become a household brand name, in addition to the fact that we're a national bank license company that can offer $250,000 directly at SoFi, but an additional $2 million of FDIC insurance through a partnership. So that attracted some dollars. But we would have been well over $2 billion had nothing happened in April. And we see similar trends continuing.
