TSY's April TARP Report Shows Loan Balances, Originations Down
First Published Friday, 10 July 2009 from Need to Know News
Treasury released its monthly bank lending survey under cover of darkness last night, well after markets had closed.
The April survey -- which covers the 21 largest TARP banks -- revealed the fourth straight decline in loan balances ($4.346trln in April from $4.38trln in March). Originations declined 7.4%.
TSY's accompany press release attributed the "slight decline" in loan balances and "modest deceleration" of originations to the demand side, citing myriad pressures faced by households and businesses.
Consumers, it said, were focused on paying down debt, while businesses showed abnormally low demand for C&I and CRE loans.
But the Fed's Senior Loan Officer Survey has indicated that, as recently as Q1, already-tight lending standards were either unchanged or tightening further. The trend undoubtedly continued this spring -- and seems to at least partially contradict TSY's claim that the lending drop-off is all on the demand side.
Also note that the only month to see an increase in loan balances was January -- when the Wachovia-Wells Fargo and PNC-NatCity mergers boosted totals.
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