Fitch: U.S. bank loan growth outpaces GDP post-crisis , especially in commercial real estate sector

U.S. bank loan growth has outpaced GDP growth since 2011, according to a new dashboard from Fitch Ratings.

“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.

There is typically a lag in loan growth recovery following a recession and while overall loan growth has not recovered as quickly since the financial crisis as in prior post-recession periods, some asset classes are performing better than in historical periods, except for 2007. Loan growth in commercial real estate, commercial & industrial and consumer lending has been particularly robust and these sectors have outpaced GDP growth since 2010.

Residential and construction loan growth has lagged other asset classes. In Fitch’s view, the weaker recovery in these loan classes is not surprising given their poor credit performance in the crisis, with delayed foreclosures and home price depreciation affecting 1-4 family residential and HELs. Likewise, construction and development loans were among the hardest hit in the crisis.

While overall bank lending has ticked-up, U.S. GSIB loan growth has been relatively flat compared to U.S. GDP growth since the crisis, however there has been some improvement since 2015.

“U.S. GSIB 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,” added Lee.

The dashboard, “Post-Crisis Loan Growth Outpaces GDP” is available at www.fitchratings.com or by clicking on the link.

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