Dave Vang, a professor of finance at the University of St. Thomas Opus College of Business, recently spoke with the Minneapolis/St. Paul Business Journal about U.S. Bank’s market share growth in the Twin Cities, crediting its size for allowing more competitive rates.
From the story:
The annual deposit and market share report by the Federal Deposit Insurance Corp. showed U.S. Bank’s local market share reached 45% this year, up from 40% last year. The Minneapolis-based bank recorded $111 billion in local deposits, a $16 billion increase from last year. The data is a one-day snapshot of a bank’s deposits on June 30.
Meanwhile, Wells Fargo’s market share dropped to 17% from 21% last year, and its local deposits fell from $50 billion to $42 billion. The trend of U.S. Bank taking market share from San Francisco-based Wells Fargo has been ongoing since 2018, when U.S. Bank first eclipsed Wells Fargo as the top Twin Cities bank when ranked by in-market deposits.
Dave Vang, a professor in the Department of Finance at the University of St. Thomas’ Opus College of Business, said he is not surprised that U.S. Bank continues to increase its market share, citing its ability to offer more competitive rates due to its size.
“The bigger you are, the cheaper it gets per customer, which makes it so you can undercut some of your competitors for pricing,” he said. He also noted that the failure of Silicon Valley Bank in March, which led many customers to take their money to banks in the “too big to fail category,” likely contributed to U.S. Bank’s deposit growth.