Wells Fargo & Co. has tightened its grip on the Minnesota market, with its market share of deposits climbing to 43 percent from 30 percent last year.
Minneapolis-based U.S. Bancorp lost ground against its larger rival with 22.52 percent of the market by deposits, down from 25 percent last year, according to the Federal Deposit Insurance Corp.'s annual deposit market share report out Tuesday.
San Francisco-based Wells Fargo attributed its stunning market share jump in Minnesota to general growth across multiple business lines, growth in its Minneapolis-based national trust business and the reclassification of funds considered "foreign deposits" last year to "domestic" this year.
The bank's Minnesota headquarters in downtown Minneapolis saw deposits jump to $63.46 billion from $24.89 billion last year, the report showed.
The bank declined to make an executive available to discuss the growth; a bank spokeswoman said there was no single key driver.
TCF National Bank held its No. 3 spot, but its share of Minnesota bank deposits slipped to 2.58 percent, down from 3.2 percent last year.
The FDIC's report provides a snapshot of deposits as of June 30 of each year. Levels can change a lot since deposits move around.
Christine Hobrough, region manager and senior vice president at U.S. Bank, said the bank's local market share might have slipped, but its Minnesota deposit base grew 20 percent to $45.27 billion. The growth was across consumer and small-business lines, she said.
"We're still gaining against our own numbers," Hobrough said.
Wells Fargo gains nationally
Joe Morford, a bank analyst at RBC Capital Markets in San Francisco, said his hunch was that the bulk of Wells Fargo's Minnesota gain was the movement of the foreign deposits.
But the "underlying story," he said, is that it continues to gain market share nationally. The nation's No. 1 mortgage maker, Wells Fargo is widely regarded as a master of the cross-sell, getting customers to expand to other bank products.
"They've emerged from the downturn as one of the healthier banks," Morford said.
Deposits, of course, tell only half the banking story. With weak loan demand and extremely low interest rates, banks have been fighting for some time to find ways to make money with all that cash.
"Companies are just parking cash, and Wells Fargo is where they're parking it," said Erik Oja, bank equity analyst at S&P Capital IQ. "They're bringing in so much money it's hard to put it to work."
Oja called Wells Fargo's dominance in Minnesota, where it has roots in the old Norwest, "probably a pretty unhealthy sign" in terms of a competitive market. But Wells Fargo is strong and well-managed, he said.
Hobrough, at U.S. Bank, said she's not worried: "We're still seeing healthy competition among all of us."
Most Popular Stories
- Entrepreneurs Chase Social Media
- European Car Sales up First Time in 20 Months
- Schedule packed with talent at the Fox
- Manila's Hollywood Week
- I never set out to be a role model but it's great to be one ; IN THE HOTSEATBetter known by his stage name Wretch 32, Jermaine Sinclair is a 28-year-old rapper from London. In 2011 his debut album Black and White sold over a million copies and scored three top five singles. His latest single Blackout was released this week
- Austin musicians point to a variety of reasons to appreciate McCartney
- Financial Times Twitter, Email Hacked
- Apple's iPhones, iPads Approved for Military Use, Sir Yes Sir!
- SINCE YOU ASKED [Pittsburgh Tribune-Review (PA)]
- Promoter McLean 'provided more musical joy than Dylan and Prince combined'