U.S. Banks’ Loans Drop to Another Record Low as Deposits Surge

U.S. bank lending fell to a new low this month, Federal Reserve data show, as a cash-rich banking system continues its cautious approach to making new loans, Federal Reserve data show.

Total loans and leases dropped to 62.8% of bank deposits in the week ended March 10. Lenders use deposits to fund new credit for their customers. Total assets at U.S. banks climbed 0.7% to $21 trillion, according to the Fed.

Some highlights of their holdings:

  • The share of safe assets -- virtually risk-free investments such as cash, Treasuries and securities effectively guaranteed by the U.S. government -- ticked up to 35.6% from 35.5%.
  • Loans and leases slipped to 49.7% of total assets, the lowest reading in data going back to 1973.
  • Home loans, as a share of total assets, fell to another all-time low.
U.S. Banks’ Loans Drop to Another Record Low as Deposits Surge

The Fed also reported the assets of large, small and foreign-related U.S. lenders. Here’s how their balance sheets compare on selected parameters:

U.S. Banks’ Loans Drop to Another Record Low as Deposits Surge
  • At the 25 biggest U.S. banks, total assets rose 0.8% to $12.17 trillion.
  • Home loans and commercial real estate loans, as a share of total assets, fell to new record lows.
  • Loans and leases slipped to an all-time low when measured against deposits, or banks’ capacity to provide credit.

Here’s how big banks’ balance sheets have changed since the Fed’s previous weekly report:

Balance Sheet ItemThis Week, $ BnPrev Week, $ Bn% of Total Assets, Latest Week% of Total Assets, Year Before% pt Change from 5Y Avg
Cash1949.91873.8167.74.8
Agency Mortgage-Backed Securities1952.51950.71614.72.3
Residential Real Estate Loans1399.91397.911.513.8-2.9
Commercial Real Estate Loans742.3742.16.17.1-1.1
Consumer Loans1143.71142.79.411.5-1.7
Commercial and Industrial Loans1306.61289.410.712.4-1.6
  • The total assets of smaller and foreign-related banks rose 0.6% to $8.85 trillion.
  • Cash and commercial and industrial loans increased from the previous week.

Here’s how smaller and foreign-related banks’ balance sheets have changed since the previous report:

Balance Sheet ItemThis Week, $ BnPrev Week, $ Bn% of Total Assets, Latest Week% of Total Assets, Year Before% pt Change from 5Y Avg
Cash1639.61631.718.513.22.5
Agency Mortgage-Backed Securities734.8732.98.37.61
Residential Real Estate Loans833.9834.69.410.8-1.1
Commercial Real Estate Loans1678.21678.31920.5-0.8
Consumer Loans388.63864.45-0.4
Commercial and Industrial Loans1332.41324.115.113.80.7

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