Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Bio
X •  LinkedIn
 

  Bank Margins Getting Squeezed Despite More Lending
Posted Under: Sectors
Supporting Image for Blog Post

 

View from the Observation Deck

  1. For banking institutions, net interest margin (NIM) is essentially the spread between the interest earned from the bank's loan portfolio and the amount of interest the bank pays on its deposits.
  2. Commercial & Industrial loans outstanding (made by all commercial banks) totaled $1.50 trillion in December 2012, up 12.78% from $1.33 trillion a year ago, according to the Federal Reserve.
  3. While the increase in loan activity is encouraging, the $1.50 trillion is 6.25% below the peak of $1.60 trillion in October 2008.
  4. Since 2008, total outstanding loans at U.S. banks and thrifts declined by 5.3% to $7.58 trillion, according to SNL Financial.
  5. One of the main reasons why NIM is under pressure is because bank deposits are rising faster than loan volumes.
  6. Deposits hit a record $10.6 trillion at the close of 2012, according to Market Rates Insight Inc.
  7. Banks usually prefer to keep their loan-to-deposit ratio near 100%. Since 2007, the ratio has dropped from 95% to 72%, according to SNL Financial.

To download a PDF of this post, click here.
Posted on Thursday, January 24, 2013 @ 3:33 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
Corporate America Getting Its Fiscal House In Order
A Happy New Year!
When Being First Isn’t Best
Sometimes Less Is More
Majority Of Top Subsectors In 2012 Consumer-Driven
It’s Not Even Close!
Large-Caps Still Relatively Inexpensive Heading Into 2013
REITs Still Popular With Investors Heading Into 2013
Waiting Game Continues For Natural Gas Investors
Majority Of Top Performing Stock Indices Since Last Bear Market Have Growth Bias
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.