Major Banks’ FX Deposits: Customer Dynamics and Spreads

Major banks are placing greater importance on acquiring foreign-currency deposits as a stable funding source supporting overseas lending. This article examines these foreign-currency deposits by customer dynamics and analyzes the factors affecting customer exits and deposit retention periods. The analysis covers foreign-currency deposits at major banks and captures trends by focusing on customer movements.

In addition, the article quantitatively analyzes the determinants of deposit spreads, which are relevant to assessing deposit acquisition costs.

It is considered important to use the analysis results to deepen discussions with major banks and overseas authorities, thereby contributing to further improving the stability of major banks’ foreign-currency funding and enhancing its monitoring.

The examination using high-granularity data confirmed that the recent increase in foreign-currency deposit balances has been driven by balance expansion among existing non-Japanese customers. The analysis examines balance movements by customer dynamics.

The expansion of transaction banking services accompanied by the acquisition of transaction deposits was found to contribute to limiting customer exits, lengthening deposit retention periods, and restraining deposit acquisition costs. The analysis quantitatively examines the factors affecting these outcomes and the determinants of deposit spreads.