Big Four US Banks - Who Has Better Deposit Beta and NIM?

The Fed delivered its first rate hike since 2018 in March 2022 against the backdrop of high inflation and rising house prices led by quantitative easing during the coronavirus pandemic and soaring energy prices. However, the magnitude of current rate hikes is much higher compared to the previous rate hike cycle of 2016-18 where rate hikes were smaller and evenly spread across multiple quarters. In the report we a) decode the Net Interest Margin of US Big 4 Banks by analyzing deposit beta, and composition of interest-earning assets, b) answer whether strong deposit beta can lead to better NIM, and c) interpret the likely trend of deposit beta and NIM to determine which bank would benefit the most in the current rate hike cycle.