Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

Romain
Fournier

Journalist
Advertisement
By the same author
More articles

Credit taps are still open

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/08/2019 | 10:36am EDT

Even though the banking industry faces a difficult economic context on the international scene, banks are still loaning to businesses. According to figures from Wells Fargo, corporate bond issuance has picked up, and growth in bank credit remains solid.



Despite volatility on markets at the end of 2018, a trade war between the US and China, uncertainty over the Fed’s monetary policy, and a slowdown in global growth, credit growth remains solid. 

Figures from financial company Wells Fargo shows that yield spreads on corporate bonds, especially on high-yield corporate bonds, widened. In addition, new issuance in the corporate bond market has picked up noticeably in the new year. In January, there was $117 billion of investment grade bonds and $17 billion of high yield bonds that were brought to market. “The $134 billion of total corporate bond issuance in January was above the average monthly run rate of 2018”, says Wells Fargo in a report.
 

Source: Bloomberg LP, Dealogic, Federal Reserve System and Wells Fargo Securities
 
Finally, regarding bank financing, growth in credit has also strengthened in recent months. Total bank credit was up by 5.0% year-over-year in the week ending January 23, more than a full percentage point higher than just a few months previously. Commercial and industrial loans (C&I) were up 11.0% relative to the same period in 2018. However, real estate loans are up only 2.9% on a year-ago basis.
 

Source: Bloomberg LP, Dealogic, Federal Reserve System and Wells Fargo Securities

Romain Fournier
© MarketScreener.com 2019
share with twitter share with LinkedIn share with facebook
share via e-mail
0