US consumer loan market
Consumer loans include credit cards, auto loans, student loans, and other consumer loans. Bank of America (BAC) captures a substantial portion of the US consumer loan market. The four largest banks are Bank of America, JPMorgan Chase (JPM), Wells Fargo (WFC), and Citibank of Citigroup (C). These banks hold about half of the total consumer loans outstanding.
Other players might lead in one or two segments. American Express (AXP) leads in card loans, but the big four banks lead in the overall consumer loan market. American Express is part of the Financial Select Sector SPDR ETF (XLF).
Loan portfolio break-up
Let’s take a closer look at Bank of America’s consumer loan portfolio. Credit card loans account for more than half of its total consumer loan portfolio.
Bank of America’s (BAC) highest credit card loan concentration is in the state of California, followed by Florida, Texas, and New York. Even though card loans account for the largest chunk of Bank of America’s consumer loan portfolio, the bank lags behind Citibank and JPMorgan in terms of outstanding card loan volume. Bank of America is focusing on growing its card segment.
Other consumer loans
Dealer financial services loans include auto, marine, aircraft, and recreational vehicle loans as well as consumer personal loans. Together, these contribute the second-highest amount to the bank’s consumer loan portfolio after credit cards.
Securities-based lending means providing loans secured by holdings in a client’s brokerage account. US securities-based loans accounted for 17% of the bank’s total consumer loan portfolio at the end of 2013. The remaining portfolio includes non-US consumer loans, student loans, and other consumer loans.