Growth in middle market commercial lending

Recent articles in the Wall Street Journal and American Banker both discuss growth in U.S. banks’ commercial and industrial (C&I) lending.  This growth in business lending has come at a time when banks are striving to find ways to catalyze revenue growth.

Banks’ first quarter financials shows particularly strong growth rates in lending to mid-sized commercial clients.  The following table shows that for some leading U.S. banks (who break out C&I loan portfolio), middle market lending was stronger than overall C&I lending in the most recent quarter (the exception to this was at U.S. Bank).

Bank

4Q10-1Q11 Change in Average Loan Portfolio

Middle Market

C&I

Chase

+4.5%

+1.2%

Comerica

+0.8%

+0.1%

Key

+1.0%

-3.4%

U.S. Bank

+3.8%

+4.5%

In addition, banks reported growth in credit line utilization rates in 1Q11, in some cases for the first time in many quarters:

  • Bank of America reported that its middle market revolver utilization rate rose to 35%
  • Wells Fargo announced that its wholesale line utilization rate rose by 50 bps in the quarter to 33%
  • Chase middle market line utilization increased 100 bps in the quarter to 35%