The latest Federal Reserve update on Assets and Liabilities of Commercial Banks in the U.S. (http://www.federalreserve.gov/releases/h8/current/) reported that commercial and industrial lending rose$2 billion, to $1,374 billion in the week ended October 228, 2009. This is a break is the long and consistent decline in C&I loans (with a fall of 13% since September 2008). However, it is too premature to say whether this is a blip, or whether the decline in such lending has plateaued.
Category Archives: Commercial Banking
3Q09 Bank deposit trends
The large U.S. banks continued to reduce rates paid on interest-bearing deposits in 3Q09, as deposit competition eases. Many banks reported q/q declines in average deposits. However, with banks’ loan portfolios also shrinking, most of these banks improved their loan-to-deposit ratios.
The largest banks (Bank of America, Wells Fargo and Chase) offer by far the lowest rates; Wells Fargo’s rate fell 3 bps between 2Q09 to 3Q09, to 0.57%. Regional banks maintain relatively higher rates, with KeyBank’s average rate above 2%.
For most banks, there was stronger growth in noninterest-bearing deposits, with many regional banks reporting double-digit annualized increases between 2Q09 and 3Q09.
|
Bank |
Average Interest-Bearing Deposits ($BN, 3Q09) |
Annualized Change in Interest-Bearing Deposits |
Rate on Interest-Bearing Deposits (3Q09) |
Rate Change (2Q09-3Q09) |
Non-Interest Deposits (3Q09) |
Annualized change in Non-Interest Deposits (2Q09-3Q09) |
|
Bank of America (domestic) |
$654.2 |
+6% |
0.98% |
-24 bps |
$259.6 |
+18% |
|
Wells Fargo |
$633.4 |
-3% |
0.57% |
-3 bps |
$172.6 |
-4% |
|
Chase |
$661.0 |
-7% |
0.65% |
-5 bps |
N/A |
N/A |
|
PNC |
$146.9 |
-13% |
1.04% |
-21 bps |
$41.8 |
+8% |
|
U.S. Bank |
$129.4 |
+11% |
0.92% |
-8 bps |
$37.0 |
-4% |
|
SunTrust |
$95.2 |
-2% |
1.40% |
-27 bps |
$24.5 |
-1% |
|
Capital One |
$103.1 |
-15% |
1.86% |
-22 bps |
$12.8 |
+6% |
|
BB&T |
$89.9 |
+56% |
1.37% |
-26 bps |
$17.4 |
+50% |
|
Regions |
$73.7 |
-5% |
1.62% |
-16 bps |
$21.1 |
+14% |
|
Key |
$54.4 |
-3% |
2.10% |
-12 bps |
$13.6 |
+37% |
|
Zions |
$31.9 |
-4% |
1.21% |
-25 bps |
$11.4 |
+27% |
|
M&I |
$33.5 |
+12% |
1.58% |
-13 bps |
$7.9 |
+28% |
|
Huntington |
$33.4 |
-1% |
1.92% |
-19 bps |
$6.2 |
+5% |
Signs of life in bank marketing spending?
Recent bank advertising campaigns (from Bank of America, American Express, Chase, Discover, and Visa) is leading to speculation that banks are once gain increasing bank advertising/marketing spend. However, the latest financial data does not support this contention. Most financial institutions reported year-over-year declines in advertising/marketing spend in 3Q09, and for many of these, the level of the y/y decline in 3Q09 was higher than that reported in 2Q09. An exception was U.S. Bank, which grew ad spending 83% y/y to $137MM.
The following table tracks trends in advertising/marketing spend for some leading U.S. financial institutions:
|
Financial Institution |
3Q09 Advertising/ |
Y/Y Change in 3Q09 |
Y/Y Change in 2Q09 |
|
American Express |
$504 |
–22% |
–47% |
|
Bank of America |
$470 |
–22% |
–13% |
|
JPMorgan Chase |
$440 |
–3% |
+1% |
|
Citi |
$317 |
–36% |
–43% |
|
Visa |
$283 |
-12% |
-15% |
|
Wells Fargo |
$160 |
-2% |
-44% |
|
U.S. Bank |
$137 |
+83% |
+21% |
|
Morgan Stanley |
$126 |
-24% |
-35% |
|
Capital One |
$104 |
-61% |
-53% |
|
Discover |
$78 |
-44% |
-22% |
|
PNC |
$58 |
-21% |
-27% |
|
Key |
$19 |
-30% |
-19% |
|
Huntington |
$7 |
+17% |
+2% |