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How does Buffett determine which banks have the lowest cost of money?


Guest hpmst3
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Hi HPMST,

 

This is actually a fairly easy metric to determine.  In fact, most banks, or at least the ones that have low costs will break it out for you.  If you go to the most recent Wells Fargo presentation (the Barclays one) on slide 18 it shows you their average interest rate on interest bearing deposits.  It will also show you the percentage of deposits that are checking or savings which will have lower interest rates than CDs of course.

 

Hope this helps.

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Thanks for both the question and the answer. I was asking myself this question not long ago. One step further, how can one find it out from financial statements?

 

I would be very interested to know, how to calculate this ratio by using numbers from WFC's financial statements.

 

Thanks!

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