The Bank of Guam has seen an unexpected growth in deposits during the Covid year, resulting from a massive stream of federal aid, coupled with the people’s spending restraint, bank president & CEO Joaquin Cook said Wednesday.
Cook said the economic shocks of the pandemic might have compelled people to better manage their resources amid uncertainty.
“People are saving more out of fear or because they are waiting to see what happens in the economy,” Cook said.
While declining to provide a figure, Cook said the influx of deposits is a trend observed in the nation’s banking industry. “Banks are flush with deposits,” he said.
In its last quarterly report for 2020, the Federal Deposit Insurance Corp. (FDIC) reported that bank deposit balances increased by nearly 18 percent, or just under $2.6 trillion, over the first nine months of 2020.
Deposits in the U.S. banking system climbed steadily through much of 2019, but once the pandemic hit, they flooded the system to never-before-seen levels, FDIC said.
The trend continues in 2021 as trillions of dollars in federal stimulus further drove up deposit volume.
“Nearly all community banks reported an increase in deposit volume during the year,” the FDIC’s first-quarter report for 2021 stated.