JPMorgan Chase CEO Jamie Dimon, said the bank has seen “a teeny-weeny little bit” of life in its loan book, highlighting Chase’s consumer products as a source of growth.
This jives with the latest from the Federal Reserve highlighting consumer loans as the only major category to post month-over-month growth in May, up 1.3% from April.
Dimon said that he expects all categories to pick up on the coattails of a strong US economy.
What does this mean for banks?
COVID flooded the economy with free-cash, crushing loan demand and shooting deposits through the roof. This means that loan-to-deposit ratios went through the floor.
Is this a COVID thing?
Not entirely. The aggregate loan-to-deposit ratio at banks has fallen every quarter since the second quarter of 2019. But, the ratio reached its lowest level in four years in the first quarter of 2021 at just 58.6%.