Leading US banks are slowing lending as bankers and borrowers refrain from taking risks in the uncertain economy, the Wall Street Journal (WSJ) reported late on Sunday.
An analysis by the WSJ showed the total loans held by 15 large US banks shrank 2.8 percent in the second quarter, and that more than half of the loan volume in April and May came from refinancing mortgages and renewing credit to businesses and not fresh loans.
The banks surveyed included financial giants such as JPMorgan Chase, Bank of America and Citigroup as well as regional banks such as Fifth Third Bancorp, based in Cincinnati, and Regions Financial Corp of Birmingham, Alabama.
The 15 banks hold 47 percent of federally insured deposits and got US$182.5 billion in taxpayer-funded capital infusions through the Troubled Asset Relief Program, the report said.
As of June 30, the banks had US$4.2 trillion in loans on their balance sheets, down from US$4.3 trillion on March 31.
Loan portfolios shrank at 13 of the big banks, with the steepest decline at Comerica Inc, Dallas, where the loan total was down 4.3 percent to US$46.6 billion in the latest quarter, the paper said.
Bank of America reported its loan portfolio slipped 3.6 percent to US$942.2 billion in the second quarter, the report said.
A spokesman for the largest US bank by assets said the decrease reflected higher loan losses and lower loan demand as borrowers pay off outstanding debts.
“There were fewer opportunities to make high-quality loans because of the recession,” he said.
The 15 banks reported about US$803 billion in loan volume in the second quarter, up 12.7 percent from the first quarter, the WSJ said.
However, nearly 60 percent of the increase in April and May came from refinancing mortgages and renewing business loans, the report said.
In contrast, new home purchases accounted for just 23 percent of all mortgage loans.
On a year-to-year basis, total loans held by the 15 big banks rose 17 percent from US$3.6 trillion in the second quarter of last year, the paper reported.
But the increase was skewed by the impact of acquisitions that included JPMorgan’s takeover of the banking operations of Washington Mutual and Wachovia’s purchase by Wells Fargo Bank, it said. Excluding purchases, loan portfolios shrank by about 10 percent as of June 30 from a year earlier, the report said.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from