How Has The Loan Mix For U.S. Commercial Banks Changed Since The Downturn?
Total loans outstanding for U.S. commercial banks fell from the pre-recession peak level of $7.3 trillion in late 2008 to $6.5 trillion in early 2010 before recovering steadily to a record $9.1 trillion at the beginning of 2017. Notably, commercial and industrial loans have seen the fastest growth over this period – swelling to over $2.1 trillion now from a low of $1.2 trillion in the wake of the downturn.
| (in $ billions) | Oct 2008 | Feb 2010 | Jan 2017 |
| Residential Mortgages | 2,103 (28.9%) | 2,099 (32.1%) | 2,156 (23.6%) |
| Commercial & Industrial | 1,586 (21.8%) | 1,223 (18.7%) | 2,101 (23.0%) |
| Commercial Real Estate | 1,721 (23.6%) | 1,620 (24.8%) | 1,973 (21.6%) |
| Credit Card | 374 (5.1%) | 318 (4.9%) | 713 (7.8%) |
| Retail | 486 (6.7%) | 494 (7.6%) | 646 (7.1%) |
| Other | 1,017 (14.0%) | 776 (11.9%) | 1,540 (16.9%) |
| Total | 7,287 | 6,530 | 9,129 |
The table above highlights the proportion of loans held by all U.S. commercial loans at three specific periods: in October 2008 (when loan sizes were at their peak before the recession), in February 2010 (when loans were at the lowest level since the recession), and at the beginning of January 2017 (the latest period for which data is available). The table uses historical data compiled by the Federal Reserve. [1] The figures in brackets are the percentage of the total loans falling in a particular category.
It should be noted that 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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A more detailed view of how these loans changed over the last five years can be found here. Bank of America has the largest portfolio of commercial and industrial loans among all U.S. banks. You can see how changes to these loans impact our estimate for the bank’s share price by modifying the chart below:
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- Assets and Liabilities of Commercial Banks in the U.S. (H.8), Federal Reserve Website [↩]