Crain's Chicago Business writes "`Remember when banks paid for deposits? Those days are returning." It says, "For nearly a decade, consumers and businesses stashing their money in banks have earned next to nothing on their deposits. That's about to change. The first signs of competitive pricing on deposits have finally emerged, blunting earnings growth at some local banks. They include Northern Trust, which caters to institutions and the wealthy, and MB Financial, which serves midsize businesses and consumers. Investors sold off stocks of these Chicago-based companies after their cost of funds rose more than expected and helped lead to lower-than-expected profits. Other local banks such as Rosemont-based Wintrust Financial and Itasca-based First Midwest haven't felt the pressure yet. But they acknowledge that it's coming. The Federal Reserve has boosted interest rates three times since December, but depositors are only now starting to see some benefit. "I think we've held off for a long time, but the demand is there now that we need deposits," Wintrust CEO Edward Wehmer said on a July 19 conference call with analysts. "So we're going to start paying up a little bit."

Email This Article

Use a comma or a semicolon to separate

captcha image