US regional banks report firm lending, echoing larger peers

US regional banks’ lending is holding firm, echoing larger banks’ signals of a resilient economy. The evidence of steady lending therefore extends beyond the biggest lenders.^[1]

Banks earn interest by making loans, so firm lending helps sustain that revenue base and suggests credit activity has not sharply contracted.^[1] How much banks ultimately earn still depends on what they pay depositors and other funding providers, and how many loans go unpaid; steady lending alone is not proof of improving profits.

Impact

• US regional banksOpportunity

  Regional lenders continue to generate interest income from lending, supporting the industry’s revenue base. Whether individual banks turn that support into higher profits still depends on funding costs and loan losses.^[1]

What to watch next

• The October 23 S&P Global Composite Purchasing Managers’ Index (PMI) for October will test whether business activity remains in expansion, cross-checking banks’ resilience signal. The estimate is 57.6 versus 58.4 previously; readings above 50 indicate expansion.