Banking-sector growth held steady overall in June but new warning signs emerged on the outlook for credit quality, according to the most recent American Banker Index of Banking Activity (IBA) survey.
The IBA Composite reading of 57.0 was up a trace from May's 56.7 reading. That
extended the IBA's more than five-year run in expansion territory. At the same time, however, the index is indicating an industry with noticeably less momentum than it enjoyed earlier this year.
That loss of momentum was most evident in the index component that monitors consumer loan delinquencies. While still hovering above the 50-point flat line level at a reading of 52.3, the component has now retreated for four consecutive months and in two regions — the Northeast and West — the component dipped below 50, pointing to an outright increase in consumer delinquency levels.
On a brighter note, bankers in the month reported ongoing pricing power on new loans, both to commercial and consumer borrowers. Several lenders did note that competition for high-quality customers continues to intensify.