Signature Bank Suffers $4.27 Billion Crypto Deposit Outflows
Signature Bank, a New York-based commercial bank, published Wednesday its trading update for the mid-Q3 quarter of this year. The bank reported that deposit withdrawals from the bank totalled $4.27 billion as cryptocurrency fear spreads.
In other words, the bank said a $4.27 billion fall in crypto outflows is to blame for a decline in its spot deposit balances.
However, the bank said it is “well-positioned to reach the target of combined loans and securities growth” for the third quarter despite pressure from the outflows of digital assets.
In contrast, Signature said non-crypto deposits increased to $2.64 billion quarter-to-date, with “specialist mortgage banking solutions” accounting for the majority of that sum ($2.29 billion).
The crypto winter has been brutal this year. So far, the share price of Signature bank has decreased 49% since the beginning of this year. This has been attributed to the ongoing harsh crypto winter.
Due to a surge in crypto industry deposits, Signature Bank had one of the best years among banks last year. But all that changed this year.
Uncertainty still pervades the crypto market because of the fallen token values and the impacts of CeFi bankruptcies.
Joe DePaolo, the CEO of Signature Bank, talked about the development and said that the bank has no direct exposure to cryptocurrencies because it only retains the cash deposits of its clients in dollars.
DePaolo said the bank’s growth does not depend on the growth of the digital currency ecosystem. The executive added that while the company’s exposure to the crypto ecosystem remains a headwind, the bank has grown loans at an annualized rate of 25.4% and deposits (ex-digital assets) by 26.3%.
Signature Bank offers financial services to institutional cryptocurrency traders and related firms, including exchanges and miners.
Of course, Silvergate Bank and Signature Bank are the only two U.S. institutions that are crypto-friendly, operating real-time payment networks.
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