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News

US-based banks face losses as personal loans decline continues

Thursday 3 September 2020 14:25 CET | News

Data and analytics company GlobalData has observed that US-based banks continue to face severe loses as they experience low net interest margins and falling fee income. 

This comes as reduced consumer spending leads to declines in personal and credit card loans. The total value of US personal loans is set to decline by 7.7% in 2020 from a pre-COVID forecast of 3.7% growth. As retail banks liquidity has been stretched, approvals for new personal loans and credit card loans and balances have been tightened. The economic uncertainty of the times and stringent new lending conditions imposed by the banks have made consumers more cautious about taking on additional liabilities. Consequently, despite low credit rates, personal loan applications have fallen.

According to GlobalData staff, the pandemic will lead to a rise in credit card transactions as cash usage declines, however, growth will be hampered by reduced consumer spending. The information is based on GlobalData’s report ‘Covid-19 Sector Impact: Retail Banking – The US’, as stated by the official press release.

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Keywords: US, banks, losses, personal loans, net interest margins, fee income, covid, consumer spending, credit card loans, retail banking, liquidity, low credit rates
Categories: Banking & Fintech
Companies:
Countries: United States
This article is part of category

Banking & Fintech

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