US Banks Cut C&I Loans 1.1% in July as NDFI Lending Jumps 20.4%
Updated
Updated · abfjournal.com · Aug 17
US Banks Cut C&I Loans 1.1% in July as NDFI Lending Jumps 20.4%
1 articles · Updated · abfjournal.com · Aug 17
Summary
Commercial and industrial loans at US banks fell to $2.92 trillion in July, contracting at a 1.1% seasonally adjusted annual rate after growing 14.2% in the second quarter.
Federal Reserve H.8 data showed the pullback came as lending to nondepository financial institutions climbed to $2.02 trillion, up 20.4% from a year earlier, suggesting banks are channeling more capital to private credit vehicles.
That shift contrasted with a busy secured-lending week: CB&I expanded its facility to $625 million, while Radiant Logistics, Superior Group and TWFG refinanced or extended bank facilities on borrower-friendly terms out to 2031.
Cooling July inflation and a Fed funds range held at 3.50%-3.75% helped keep the refinancing window open, with futures markets pricing a 64% chance the Fed stays on hold in September.
The broader read-through is a bifurcated credit market in which direct bank lending to operating companies is shrinking even as banks support the funds competing for those same middle-market borrowers.