Tag: Liability Performance

10 Tactics To Dampen Deposit Betas

Lowering Deposit Costs

Cost of funding for community banks has risen notably, but the banking industry’s rising deposit betas is creating a greater challenge for community banks.  Deposit beta is the change in funding costs divided by the change in interest rates.  Rising deposit betas may require some community banks to change their focus on customers, products and ALM assumptions or risk a reduction in NIM and profitability. In this article, we highlight the current and projected state of deposit betas and then outline ten of the best tactics for dampening or even lowering the beta at your bank.

 

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