Data Snacks, Member Exclusive

Data snack: US banks’ growth rates are down in Q1 2022

  • Growth is stalling across the US banking sector, with both deposits and loans up marginally from the fourth quarter of 2021.
  • This could be an indicator of current macroeconomic conditions, as the Federal Reserve tightens up market conditions so that the economy will moderate.
close

Email a Friend

Data snack: US banks’ growth rates are down in Q1 2022

U.S. commercial and savings banks reported slower growth on both the deposit and lending sides of their balance sheets in Q1 2022 compared to the previous quarter, according to data compiled by S&P Global

This could be a consequence of current macroeconomic conditions, as policymakers look to slow down the US economy in order to lower inflation. The Consumer Price Index was up 8.5% in March 2022 - its highest level in more than 40 years. And with the Fed rising interest rates, money has become more expensive, making borrowing less appealing. 

In the fourth quarter of 2021, total deposits across the industry as well as loans and leases were up by 3%. Three months later, the metric decreased to around 1%. 

Looking at some of the biggest banks with more than $500 billion in assets, JPMorgan Chase recorded the highest increase in deposits of 3.3% but was also the only one to decrease its loans and leases volume.

Meanwhile, PNC Bank grew its lending portfolio by 1.8% while reducing its deposits by 2%. 

US banks’ credit provisioning has also recorded an increase in the quarter, which can impact bottom line profitability. A provision from credit losses represents an estimation of potential losses that a bank could experience due to credit risk, and is recorded as an expense on a bank’s financial statement.

Credit loss provisions rose for the second consecutive quarter to $4.5 billion after banks experienced negative provisioning in the first three quarters of 2021.

JPMorgan Chase booked the largest provision at $1.34 billion, up $2.55 billion from the previous quarter. Among the large banks that continued to record a negative provision were Wells Fargo and Truist Bank, S&P Global found.

But there are some good signs in the market as well - credit quality remains healthy at US banks, despite the current disheartening macroeconomic factors such as declining labor productivity and accelerating consumer inflation.

0 comments on “Data snack: US banks’ growth rates are down in Q1 2022”

10-Q, Member Exclusive

Chasing ambitions: SoFi elevates its game by participating in underwriting the Instacart IPO

  • Underwriting part of the Instacart IPO can be a big shot for SoFi, which went public in 2021 and is best known for student loan refinancing.
  • Also, Wall Street banks added modest gains to the IPO Index last week.
Sara Khairi | September 18, 2023
10-Q, Member Exclusive

Dime Community Bancshares steps into healthcare lending as part of its commercial banking expansion

  • Dime makes a move into the healthcare sector to offer financing solutions and support capital-intensive projects.
  • The CFPB is keeping tabs on Apple’s policy of limiting access to the NFC chip technology that makes Apple Pay the only mobile payment service that utilizes the ‘tap and go’ technology embedded in iOS devices limiting other companies from developing their own tap-to-pay apps for Apple devices.
Sara Khairi | September 11, 2023
10-Q, Member Exclusive

Better.com’s shiny IPO debut: Can the mortgage lender pave its way to become a Wall Street darling?

  • Can Better.com gain Wall Street's respect?
  • Federal Reserve Chair Jerome Powell on Friday warned that additional interest rate increases could be yet to come, as inflation is still above where policymakers feel comfortable.
Sara Khairi | August 28, 2023
10-Q, Member Exclusive

‘We still need to earn the trust of millions of Americans who are experiencing digital banking for the first time’: Dave’s Jason Wilk

  • Jason Wilk, CEO and founder of Dave, talks about second quarter results, challenges for neobanks at large, and what's in store for the firm in the months ahead.
  • Marqeta shares popped 8% last week as the firm extended its alliance with its largest customer, Block, through 2027 for transaction services for Cash App and Afterpay.
Sara Khairi | August 21, 2023
10-Q, Member Exclusive

Q2 earnings & beyond: 3 questions with Dee Choubey, CEO of MoneyLion

  • Dee Choubey, CEO of MoneyLion talks about factors that contributed to the second quarter results, challenges regarding regulation and compliance, and his outlook on the US economy for the second half of 2023.
  • Upstart exceeded expectations on revenue and net income for Q2, yet its shares tanked sharply nearly 53% in a week, after the lending platform issued Q3 revenue guidance that fell short of analysts' expectations.
Sara Khairi | August 14, 2023
More Articles