Monday, October 12, 2009

Business Lending Performance by the Top 22 TARP Recipients

Banks continue to be criticized for not using their TARP money to increase lending. In spite of a somewhat improving economy, it’s true that lending to businesses isn’t increasing, in fact, lending to businesses has declined more than 5% in the past six months. Looking at reports filed by the top 22 TARP recipients, from February to July commercial & industrial (C&I) loans outstanding declined 7.5% while commercial real estate (CRE) loans held steady. (Click on image to enlarge)

Looking at new originations, originations for both C and I and CRE loans vary from month to month but the overall average remains at $50B per month.

The banks have broken out figures for small business loans (included in the overall totals) since April. For the four month period between April and July, small business loans outstanding fell 1.5% while new originations seem to be trending upward.

Although the overall decline is small for small businesses, as a key component to the US economy, it will be important to monitor lending to this segment.

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