How Have Third-Party Mortgage Servicing Portfolios For The Largest U.S. Banks Changed In The Last 5 Quarters?
The five largest U.S. banks have seen a notable reduction in their total third-party mortgage servicing portfolio over the last five quarters, as the figure has fallen from over $2.9 trillion in Q2 2015 to $2.6 trillion now – a year-on-year reduction of 9%.
While the regional banking giant U.S. Bancorp stands out as the only major bank to witness an increase in its third-party mortgage servicing portfolio, the overall decline in the total figure can be attributed to two key factors: firstly, weak activity levels in the mortgage industry over recent years coupled with steady mortgage repayments have shrunk outstanding loan volumes; and secondly, the banks have been forced to reduce their focus on the mortgage servicing industry in view of stricter capital requirements and poor quality of legacy mortgages. The latter is particularly true for Bank of America, which has reduced its third-party mortgage servicing portfolio from a peak level of $1.7 trillion in 2009 to just $353 billion now – a reduction of nearly 80%.
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The chart below captures Bank of America’s third-party mortgage servicing portfolio over the years, and also includes our forecast for it. You can see how changes to this portfolio affects our price estimate for the bank by modifying this chart.
See the links below for more information about the 5 largest U.S. commercial banks:
- What Was The Total Size Of Outstanding Domestic And Foreign Loans For The Largest U.S. Banks In Q2 2016?
- How Has The Total Loan Portfolio Of The Largest U.S. Banks Changed Over The Last 5 Quarters?
- How Much In Domestic And Foreign Deposits Did The Largest U.S. Banks Hold In Q2 2016?
- How Have Total Deposits For The Largest U.S. Banks Changed Over The Last 5 Quarters?
- How Have The Loan-To-Deposit Ratios For U.S. Banks Trended Over Recent Quarters?
- How Much In Outstanding Mortgage Loans Did The Largest U.S. Banks Service At The End of Q2 2016?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment/ ask questions on the comment section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for U.S. Bancorp | Wells Fargo | JPMorgan | Bank of America | Citigroup
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