https://www.msn.com/en-us/money/markets/big-short-michael-burry-sounds-the-alarm-on-two-u-s-banks/ar-AA18WsY7?ocid=msedgntp&cvid=abe88fb997984f93878d2fa619f1a00a&ei=11
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We all remember what happened during COVID with Tim Welsh's disastrous branch "strategy," which seemed to be to bleed off retail customers who wanted to use branches (because those are high cost service channels).- How Tim Welsh is still employed is beyond belief, most other banks churn out their failed executives, BofA, Chase, Wells etc. The Retail Bank has been bleeding customers for years yet this guy directed his teams that numbers didn't matter and to literally focus on taking naps during working hours and other gimmicks like penny checks.
Are you kidding. USB is very solid and strong. USB participated to the recently TARP 2.0 with other BANKS to bail out another bank recently. USB loaned out a Billion Dollars
One thing to keep in mind. Many of U.S. Bank's "uninsured" depositors are government institutions, we have a large government banking market share, and those "uninsured" government deposits actually require a larger reserve than normal. These are not private equity clients that may need to pull all their funds at any time to support cash strapped investments. I am no expert on the deposit side of the bank but I do think that article was somewhat misleading.
It is not shocking, but noteworthy. The fact that a significant percentage of USB's deposits are uninsured stands in stark contrast to the long tradition of the bank having a large base of low cost retail deposits (which equates to much lower risk). Here is an article from 2018 talking about the stagnation of USB's deposit inflows relative to their peers:
https://www.trefis.com/stock/usb/articles/449238/should-investors-be-worried-about-u-s-bancorps-stagnant-deposit-base/2018-09-06
It would be hard to prove this without more data, but here are two observations.
- The article above coincides with when Richard retired and AC and the McKinsey consultants took over and began chopping BOTH employees and customers.
- We all remember what happened during COVID with Tim Welsh's disastrous branch "strategy," which seemed to be to bleed off retail customers who wanted to use branches (because those are high cost service channels).
One might conclude that the funding concerns highlighted in this article are the direct result of AC's lack of a cohesive strategy, and his leadership team's overall lack of experience and expertise in actually running a bank. Perhaps your chickens are coming home to roost, Andy and Tim?
That link didn’t work but I found the same article here for anyone that wants to read.
https://www.thestreet.com/banking/big-short-michael-burry-sounds-the-alarm-on-two-us-banks