Data and estimates by the Federal Reserve staff in the H.8 “Selected Assets and Liabilities of Commercial Banks in the United States” show rise in bank lending in recent weeks.
The loan growth was moderate and may be seasonal or some window-dressing by corporations rather than a renewal of the strong loan growth that was experienced throughout much of 2018.
For the largest 25 banks, there was a pick up in C&I lending.
For Community Banks and other Regional Banks, there was more broad-based activity, in particular, consumer lending.
As 2018 ends and 2019 in nearly upon us, let’s do a quick review of lending activity during 2018 and current views on what these trends may suggest for 2019:
Community Banks and Other Regional Banks: YoY total loan growth was 8.1%. C&I and consumer lending were strongest at over 11%. Commercial real estate and residential real estate loans solidly rose at over ~7% or more.
Large Banks (Top 25):YoY total loan growth was more modest at 2.8%. C&I lending was the primary source of growth - nearly 8%. Consumer lending was up only 2.3%. Both commercial real estate and residential real estate loans were either flat or down for the latest 52-weeks.
2019 Perspective: With most economists forecasting slower growth for the U.S. economy in 2019 - but still growing solidly, the expectation for lending books should be more moderate growth throughout 2019 when compared to 2018.
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