Lending experiences biggest increase in seven years, Diego Cuenca

2014 was a big year for lending, as loan balances increased last year by $151.7b which was more than 2010 and 2011 combined. This has lead to a fourth quarter profit of $40.4b for banks. The most profitable 3-month period in 23 years. However, while banks have been aggressive in increasing loan issuance, they have socked away an additional $60b in treasuries and $19b in cash during the quarter. This is most likely due to regulation keeping financial institutions away from riskier assets.

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All that lending made 2014 a good year to be a bank. Profits in the fourth quarter for all banks was $40.4 billion. That was the biggest three-month profit for all U.S. banks in at least 23 years. That jump took place despite the fact that interest rates are low, pushing down the profitability of banks, and that the largest banks in the nation largely had a disappointing fourth quarter. Profits appear to be rising at small and mid-size banks. Banks have been lending more aggressively to businesses for a while. Business loans rose $42 billion in the fourth quarter, the most of any category. But credit card lending was not far behind, rising $35 billion.

http://fortune.com/2015/02/12/lending-experiences-biggest-increase-in-seven-years/