High Inflation and Rising Interest Rates to Boost U.S. Commercial Bank Revenues

Growth in interest income will outpace non-interest income

CLEVELAND, September 28, 2022 /PRNewswire/ — U.S. commercial bank revenue is expected to grow 5.8% annually in nominal dollars through 2026, according to The Commercial Bank: United States, a report recently published by Freedonia Focus Reports. Banks will benefit from growing economic activity and improving consumer and business incomes through 2026. Gains in interest income are expected to outpace non-interest income due to higher interest rates then that the Federal Reserve is trying to combat the high inflation experienced in 2021 and 2022. In addition, higher inflation rates will increase the face value of loans requested and interest payments. However, inflation over the forecast period will reduce the value of loans and leases already held by banks.

Commercial bank assets are expected to grow 5.0% annually through 2026. Advances will be boosted by projected increases in loans and leases, in addition to inflation pushing up asset values. The expected rise in interest rates will help generate higher returns on bank assets and contribute to growth.

The value of gross loans and leases is expected to increase by 5.8% per year through 2026. Demand for loans and leases is expected to benefit from projected GDP growth through 2026, despite declines in GDP early in the year. the forecast period. In particular, mortgage originators should benefit from continued growth forecasts for residential and non-residential investment in structures. Lending to the commercial and industrial sector is expected to rise due to increased investment in equipment as manufacturing output continues to grow. The increase in personal disposable income will stimulate personal spending and drive demand for consumer finance. Inflation over the forecast period will also contribute to the growth in the gross value of loans and leases.

This and other key information is presented in The Commercial Bank: United States. This report projects through 2022 and 2026 the following measures of the U.S. commercial banking sector in nominal U.S. dollars:

  • interest income
  • non-interest income (e.g. fees)
  • net amortization of loans and leases
  • net revenue
  • assets
  • gross loans and leases
  • deposits

Additionally, credit union revenues are projected in nominal US dollars through 2026.

To illustrate historical trends, the measures of commercial banks mentioned above and credit union revenues, as well as the number of respective enterprises, establishments and employees, are provided in annual series from 2011 to 2021. In addition, segmentation of commercial bank assets, gross lending and leasing, and deposits are provided in annual series from 2011 to 2021.

The scope of this report covers commercial banks, commercial banking subsidiaries of banks or financial holding companies, and savings institutions (also called savings and loans, or thrifts) that are insured by the Federal Deposit Insurance Corporation ( FDIC). Credit unions are not FDIC insured and are excluded from commercial bank figures, but a separate overview is provided in the report.

Financial institutions that provide commercial banking, investment banking, and insurance services are usually incorporated as bank holding companies. The asset management and investment banking subsidiaries of bank holding companies are excluded from the scope of this report. Also, stand-alone investment banks, insurers, mutual funds, and other investment entities or securities dealers are excluded.

More information on the report is available at:

About Freedonia Focus Reports
Each month, The Freedonia Group – a division of MarketResearch.com – publishes over 20 new or updated Freedonia Focus reports, providing up-to-date, unbiased analysis on a wide variety of markets and industries. Published in 20-30 pages, the Focus report’s coverage ranges from raw materials to finished manufactured goods and related services such as freight and construction. Additional Service & Industry reports can be purchased at Freedonia Tuning Reports Where MarketResearch.com.

The analysis is intended to guide the busy reader through relevant topics in quick succession, including:

  • total historical market size and industry production
  • segmentation by products and markets
  • identification of market drivers, restraints and key indicators
  • outlook segment by segment in 5-year forecasts
  • supply base survey
  • suggested resources for further study

Press contacts:
Corinne Gangloff
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SOURCE The Freedonia Group

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