Earlier this week, we discussed why community banks need more granularity in their credit grades in order to compete with more sophisticated banks (HERE). Our example focused on just the credit and loan loss allowances between a set of loans that were all rated with a credit grade four by one bank as we showed what happens over the course of a quarter when they have to compete. We stopped short on pricing, which is our topic today.
Tag: Commercial Loans
In the past six weeks, the banking landscape has radically changed. Spreads, volume forecasts and the economics of banking have shifted. The outlook for loans credit, deposits, and fee lines are now all different than they were prior to the Trump Administration and banks that are not thinking through the next four years will find themselves being reactive. Most importantly, the mindset and catalysts within public psychology have changed which has caused new thinking within bank marketing.
Commercial banks grew loan balances by 2.11% in the second quarter of this year compared to the first. This growth belies that some banks increased their commercial loan portfolios more than the industry average and other banks experienced shrinking loan volumes. While the industry is experiencing much needed total growth, that growth is not evenly distributed among banks.