Keefe, Bruyette & Woods analysts claim in a new research paper that U.S. commercial bank loans dropped $7.2 billion, or 0.1%, for the week ending Nov. 21.
This decrease is attributed mainly to further volatility in residential mortgage lending and consumer weakness, KBW wrote in its report titled, "Residential Mortgages Decline Again; Solid Core C&I Growth Continues."
Home lending continued to fall while large bank loan books contracted $9.3 billion sequentially. While momentum is still moving forward with core commercial and industrial lending growth expanding $5.6 billion sequentially, consumer activity is getting weaker, KBW said.
Small bank loans dropped even lower by $6.5 billion or 0.28%, while residential mortgages continued to fall further. C&I remained positive while consumer activity weakened as credit card balances slipped.
Foreign bank loans rose $8.5 billion sequentially, strengthening an already strong increase in wholesale lending. Since the end of the third quarter, foreign bank loans have now risen by 1.4% this year. This compares to 13.6% growth last quarter.