Chase ended 2020 with $1.4 trillion in cash and marketable securities, which it said is some $450 billion in excess of what regulators require. Across Chase, Citigroup, PNC, and Wells Fargo, cash assets at year-end represented about 15% of their total assets, well up from less than 10% a year before.
The impact of all that excess cash on profitability is becoming a tad more muted. While banks don’t have great options for deploying cash without loan growth, the banks mostly increased their investment-securities assets in the fourth quarter, against the headwind of fast prepayment of mortgage-backed securities. This helped slow their quarterly declines in net interest margin, a measure of banks’ core profitability.