http://seattletimes.nwsource.com/html/businesstechnology/2016532769_earnings18.html
Despite all the bleak economic news, a funny thing has been happening in the financial industry: The banks have quietly turned on the lending spigot.
Loan growth is still modest and weighted toward the strongest borrowers. But after several quarters of flat or plunging loan balances, several of the nation’s biggest banks are reporting increases.
On Monday, Citigroup officials said the bank recorded loan growth, compared with a year ago, in almost every one of its businesses during the third quarter, and in almost every corner of the globe. Its profit in the third quarter rose 74 percent.
Wells Fargo, which saw its third-quarter profit jump 21 percent, said new loan commitments to small businesses rose 8 percent, while lending to bigger companies has been growing for 14 months in a row.
But the new lending numbers suggest that while the economy remains extremely fragile, the confidence of consumers and businesses may be more resilient than many experts had believed.
Most banks have ratcheted up the underwriting criteria so that fewer new borrowers qualify for a loan, especially in the housing markets hit hard by the recession. As existing loans end, they are less likely to replace them with a new one.
But there has been a modest increase in lending elsewhere. Overall, corporate lending has rebounded 7.2 percent after bottoming out in October 2010.
Some of the growth was due to foreign lenders ceding some ground to Wells and other large U.S. banks, rather than an overall increase in demand.
Even its mortgage business, which reported more than a 50 percent jump in home-loan applications, owed some of the lending growth to consumers refinancing existing loans — not people obtaining new ones.