How Has The Total Loan Portfolio For The U.S. Banking Industry Changed Over The Last 5 Quarters?

September 13th, 2016 by Trefis Team
-6.90%
Downside
60.59
Market
56.41
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Wells Fargo

The U.S. banking industry has witnessed a brisk 8% growth in total loans between Q2 2015 and Q2 2016. While commercial and industrial loans have seen the largest growth of over 10% between this period, the sluggishness in the mortgage industry has resulted in outstanding home loans only increasing by 3% year-on-year.

CB_QA_USLoanChange_16Q2

* Credit card loans include unsecured revolving credit, while retail loans include auto loans, student loans and other secured consumer loans. Other loans are made up of loans to financial institutions as well as the lending of federal funds and reverse repurchase agreements.

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The notable rate of growth – especially in commercial loans – stems from the prolonged low interest rate environment that has been prevalent since the economic downturn of 2008. While easy availability of cheap credit has spurred the demand for loans, a steady improvement in economic conditions has also made individuals and companies optimistic about the future – driving loan demands further. As the U.S. economy is expected to continue to improve, loan growth is likely to continue (albeit at a slower rate) once the Fed begins the process of normalizing benchmark interest rates.

See the links below for more information about the 5 largest U.S. commercial banks:

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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