Loan Growth as Share of GDP Picks Up in Last Two Years

U.S. bank loan growth to commercial firms is still lagging behind pre-Great Recession levels, but the loan level has been outpacing GDP growth in the country since 2011, according to a new Fitch Ratings benchmark tracker.

"Loan growth has followed the pattern of a historical lag after a recession, and while growth has not returned to pre-crisis peaks, it has posted above-average growth for the last two years, compared to overall loan growth since 1985," said Joo-Yung Lee, head of North American financial institutions, Fitch Ratings.

Some asset classes are performing better and receiving more loans than during historical periods, except for 2007, including commercial real estate and commercial and industrial lending, Fitch said. Lending to these sectors has outpaced GDP growth since 2010.

Meanwhile, residential and construction loan growth has fallen behind other sectors, Fitch analysts said. That’s not entirely surprising, though, considering these sectors’ poor credit performance during the crisis, and the fact that construction and development loans were among the hardest hit.

"U.S. GSIB [global systemically important banks] loan growth has likely lagged due to significant de-leveraging post-crisis, their focus on building capital and liquidity, and ensuring compliance with increased regulatory requirements, such as stress testing and Basel III," Lee said.

– Nicholas Stern, senior editor

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