Citigroup Inc. nearly doubled its deposits in the Chicago area last year, making it the fifth-largest bank in the area, up from the eighth-largest bank a year earlier.
The nation’s largest financial-services company saw Chicago-area deposits grow from $4.2 billion, or 2.4 percent of the market, in 2000 to $8.1 billion, or 4.3 percent of the market, in 2001.
Citigroup spokesman Mark Rodgers declined to comment on the increase in Chicago, but said the company has seen growth in deposits nationwide.
Deposit figures–the most common measure of market share–are collected by the Federal Deposit Insurance Corp. each June and analyzed by a private firm called SNL Financial in Charlottesville, Va.
Citigroup’s rise was accompanied by a decrease in Chicago-area deposits at Bank of America Corp., which fell from ninth to 13th in market share. The Charlotte-based bank’s deposits fell from $3.5 billion, or 2.0 percent of the market, in 2000 to $2.6 billion, or 1.3 percent of the market, in 2001.
“One reason for the drop is that we’ve seen significant migration to money manager accounts and money market savings accounts,” which are not recorded as deposits for the FDIC, said Diane Wagner, spokeswoman for Bank of America in Chicago. “We’ve seen 22 percent growth in money manager accounts across the country. We repriced accounts a little over a year ago to pay accountholders more money.”
Chicago remains a city with a few large players at the top facing hundreds of competitors with much smaller pieces of the market. The banks with the biggest market share remained the same in 2001:
Bank One Corp. has the most deposits, with 17.7 percent of the market in 2001 compared with 17.0 percent in 2000. ABN Amro North America, the parent of LaSalle Bank, follows with 13.1 percent of Chicago-area deposits, down from 15.0 percent in 2000. In third place is Bank of Montreal, owner of Harris Bank, with 8.8 percent of the market, down from 9.4 percent in 2000.
Following Harris, the market share figures drop significantly. Northern Trust Corp., which regularly ranks fourth, has only 4.8 percent of the Chicago area’s deposits, down from 4.9 percent in 2000. After Citigroup in fifth, the market shares dwindle even further: The 10th-largest bank in Chicago, for example, is MAF Bancorp Inc., with just 1.8 percent of the market in 2001.
Bank Notes: Bank stocks took a beating last week as concerns grew about accounting practices at the nation’s financial institutions, fueled by a restatement of earnings at PNC Financial Services Group in Pittsburgh. The Federal Reserve told PNC to adjust its accounting for bad loans and to disregard advice from its accounting firm, Ernst & Young. Bank analyst Judah Kraushaar at Merrill Lynch wrote in a research report, “We believe that the initial concern that regulators might broadly question bank accounting for problem asset dispositions seems far overstated.”
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– During a forum on the Enron situation last week at the University of Chicago Graduate School of Business, Chicago Board of Trade Chief Executive David Vitale said the energy trader’s failure has sparked a “buyer beware” environment in the over-the-counter trading market. “Our capital markets are built on integrity. We are facing a crisis of confidence in the integrity of that data,” he said. He said the increased risk will lead to more regulation of over-the-counter markets, and, thus, higher trading costs. He also acknowledged there is a risk that calls for more regulation may “drift into the regulated exchange market, though that would be totally unjustified.”