Friday, December 11, 2009

Update: Business Lending Performance by the Top 22 TARP Recipients

Over the past several days Obama, Geithner, and other Federal officials talked about a new Jobs program and extending TARP. With government programs in the news, I was reminded to update my data on lending activities by financial institutions who received capital infusions under TARP. Economic data continues to improve, but lending to businesses continues to decline. Over the past six months, business lending by the top 22 TARP recipients has decreased an average of 1.6% every month, with September (the latest data available) dropping 2.2% from August.

Since the beginning of monthly TARP reporting, commercial & industrial (C&I) loans outstanding declined 11.8% while commercial real estate (CRE) loans held steady.

Looking at new originations, originations for both C&I and CRE loans vary from month to month but the overall average ($48B) dropped slightly in the past few months.

The banks have broken out figures for small business loans (included in the overall totals) since April. From April to September, small business loans outstanding fell 3.7% while new originations have flattened out.

Unfortunately, the rate of decline in small business lending by the top TARP recipients is increasing; a bad sign for struggling small businesses.