Small banks are facing some of the largest personnel costs in the banking industry, while large institutions are tepidly adding jobs, an analysis by the Wall Street Journal published Wednesday has found.
The analysis by the newspaper noted that while the 7,400-institution strong banking industry grew by nearly a quarter of a percentage point in the third quarter, the more than 2,500 banks where layoffs did occur lost a combined 20,332 jobs, or 2.5 percent of the workforce in those firms. A large portion of those losses were at smaller banks with less than $10 billion in assets.
The increase in positions across the industry itself was considerably muted: 5,012 jobs, the lowest increase since the sector saw a net loss of jobs in the third quarter of 2010 and considerably less than the 14,434 positions added last quarter.
Citing FDIC data on operational costs, the newspaper noted smaller banks were under pressure to trim down costs through mergers and firings. According to the FDIC, 76 cents out of every $1 in revenue at the smallest of banks (those with less than $100 million in assets) is eaten up by costs. That figure is 58 cents out of every $1, nearly a quarter less, at the largest 106 banks in the nation.
The news comes as recent events -- most notably Bank of America's announcement and subsequent reversal of a decision to impose a $5 monthly fee on debit card use -- have turned a tide of public sentiment against big institutions.