US banks are piling cash onto their balance sheets while showing a weak appetite for lending, according to the financial data and analytics firm S&P Global.
The firm says that in the first quarter of 2025, banks increased their holdings of cash and equivalents by $88.66 billion.
JPMorgan Chase and Citibank, the first and third-largest US lenders by total assets, drove the bulk of the increase, backed by strong deposit growth, particularly from non-US deposits.
“In the first quarter, banks parked more money in cash and equivalents while customers took a wait-and-see approach on the impact of tariffs. The median change in cash and equivalents soared to 11.0%, up from 0.3% in the fourth quarter of 2024.”
Meanwhile, loan growth during the first quarter rose by less than one percent point.
Specifically, banks cut back on credit card, nonresidential construction, farm and auto loans, setting a trend that’s likely to continue.
“Analysts have been cutting net loan growth estimates for most of the largest US public banks and are not projecting a significant rise for the remainder of the year.”
