Big Banks: Commercial Lending Losses Sneak In

Big banks are experiencing an increase in commercial lending losses and a decline in deposits, highlighting potential challenges for small and medium-sized businesses (SMBs). JPMorgan Chase reported a 2% increase in net revenues from corporate banking, but a decrease in net interest income due to lower balances. Business banking average deposits were down 4% year on year and loans were down 5%. Bank of America noted that losses are trending toward normalized levels and highlighted growth in commercial borrowing. Wells Fargo reported higher middle market banking revenues, but a decrease in commercial and industrial loans and total deposits in its commercial banking segment. This data suggests that businesses are seeking alternative financing routes and highlights the need for SMBs to access credit. Nearly 34% of SMBs do not currently use credit but want to start doing so in 2024. The article raises the question of whether SMBs will find support from traditional banks or have to tap into alternative financing options.