BlackRock Observes Banking Rout as an Opportunity for AUM Growth

Posted on 04/14/2023

Even in the wake of the bank failures of Silicon Valley Bank and Signature Bank, BlackRock’s assets under management rebounded from the US$ 8 trillion range to the hit US$ 9.09 trillion at the end of March 2023. BlackRock received US$ 110.318 billion in quarterly net inflows for the reported period. BlackRock received US$ 34 billion of bond ETF net inflows and accounted for over 60% of total fixed income ETF trading volume during the quarter, according to the company. The asset manager touted US$ 103 billion of quarterly long-term net inflows, representing 5% annualized organic asset growth, driven by continued momentum in bond ETFs and significant outsourcing mandates.

During the month of March 2023, the United States saw the 2nd and 3rd largest bank failures in its history due to sudden customer deposit outflows. Following the collapse of SVB and others, some investors poured money into BlackRock’s cash management funds. BlackRock’s cash management platform saw US$ 8 billion of net inflows in the first quarter. Flows were driven by surging demand for their cash management solutions in March as clients look to diversify away from deposits and enhance cash yields. BlackRock sees that more and more deposits are leaving regional U.S. banks and they’re going into ETFs and into any form of cash and money market funds.

BlackRock is expecting more market dislocations and sees them as opportunities to grown AUM. Profit-wise, BlackRock reported net income of US$ 1.16 billion for the quarter versus US$ 1.44 billion in the same period a year earlier.

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