Deposit market share

The deposit market share is a way of measuring the size and performance of a bank in the United States

Definition

In the simplest sense of the phrase, "deposit market share" is defined as the amount on deposit at a particular bank divided by the total amount on deposit at all banks. In practice however, the term "deposit market share" is used to refer to the deposit market share of commercial banks and savings and loan organizations calculated by the Federal Deposit Insurance Corporation (FDIC). The FDIC calculations do not include money deposited at credit unions, and the cash accounts at brokerage firms.

Importance of this metric

This metric is considered by many to be an important banking performance measure although many regard it as is misleading for the following reasons:

Use in anti-trust proceedings

When two banks merge, a survey is done to ensure that the combined deposit market shares will be no larger than 25% in a particular state, or 10% nationally. If one or both of those percentages are higher than allowed, the banks can elect to still do the merger but they would need to divest (i.e. sell off branches and customer accounts) enough branches to get them within the guidelines.

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