High interest rates funnel deposits to international banks
Most international banks in South Florida are seeing an increase in deposits as the economy continues to improve.
The strength of the US dollar, high interest rates and the influx of foreign buyers of Miami real estate are all contributors to the increase in deposits in foreign banks in Miami, according to Greg Hernandez, an analyst from Bankrate, an independent publisher and comparison service for market trends.
“Interest rates in the US are rising, and that’s in contrast to the rest of the world, where they’re still at low or negative interest rates. There are currency crises in other countries that have accelerated the amount of money leaving those countries and there are people that are looking to either immigrate to the US or just move money out of their home country,” Mr. Hernandez said. “There is a lot of money flowing into the US for a variety of reasons.
Interest rates are rising because the economy is doing better and no longer dependent on near zero level of interest rates that were necessary to revive the economy after the financial crisis.” According to data from the Federal Deposit Insurance Corp., an agency that banks pay to insure bank deposits, international banks in Miami-Dade saw an increase in deposits over the past four years.
Banesco USA saw a large jump from $664,449,000 in deposits in June 2014 to $877,971,000 in deposits in June 2018. Banco de Brasil Americas also saw an increase from $130,828,000 in deposits from June 2014 to $406,039,000 in June 2018. The International Finance Bank saw an increase from $303,564,000 in June 2014 to $435,407,000 in deposits in June 2018.
Popular Bank has a strict vetting process, in particular for international investors wanting to deposit into the bank, but has still seen steady growth. “We’ve been very careful about the type of customers that we bank with on the international private banking side,” said Israel Velasco, Florida regional executive for Popular Bank. “We’ve seen steady growth. We have about $122 million in international private banking customers. It’s been a steady increase.”