U.S. Bank’s “other retail” loans
U.S. Bank (USB) has a separate loan category called “other retail” loans. It consists of four main types of loans:
- revolving credit
- student loans
These loans account for close to 11% of U.S. Bank’s total loan book. The retail loan is a big focus for most of the banks in the Financial Select Sector SPDR (XLF). Bank of America (BAC), JPMorgan Chase (JPM), and Wells Fargo (WFC) all are strong in the retail loan segment.
“Other retail” loans showed decent growth
The loan book for the “other retail” loan segment was $27,317 million at the end of 4Q14. This was nearly 5% growth—compared to 4Q13. In this segment, non-performing loans were very low at 0.06%. The net charge-off rate was also healthy at 0.76%.
Auto loan growth was strong
Auto loans form a large part of this segment. Auto loans were $14,644 million at the end of 4Q14. They had a healthy 9% growth—compared to 4Q13. Non-performing auto loans were also very low at 0.03%. The net charge-off ratio of auto loans was low at 0.33%.
Most of the auto loans were originated by the indirect channel. Indirect channel accounted for 94% of auto loan originations. The quality of auto loans also remained high. The weighted FICO score average for auto loans, originated by the indirect channel, was 763. The growth in auto loans also made up for declining student loan balances.
A few other retail loan segments
Retail leasing and home equity and second mortgages are the remaining retail loan segments. The loan book for the retail leasing segment was $5,939 million at the end of 4Q14. The retail leasing segment accounted for nearly 2.5% of the loan book. Home equity and second mortgages accounted for nearly 6.5% of the loan book. For both of these segments, the loan book didn’t change much from 4Q13.