There is a wide difference in loans as assets across banks
Loans as a percentage of assets vary widely across banks, mainly due to the focus of the bank. Traditional banks are likely to have more loans. Those with an investment banking focus are likely to have lower loans. Full-service banks are likely to have a number somewhere in between traditional banks and investment banks.
Wells Fargo is the best of the big four banks in terms of loans
Wells Fargo (WFC) has the highest percentage of loans as assets among the big four banks. Wells Fargo has 54.19% of its assets as loans. Bank of America (BAC) follows closely behind with 53.88%. JP Morgan (JPM) is considered to have the strongest investment banking division among the big four. JP Morgan has only 33.58% of its assets as loans.
Mid-sized banks have a higher percentage of loans
US Bank (USB) has the highest percentage of loans among the top 10 banks by assets. Among the well-known banks, Sun Trust has the highest percentage of loans as assets. This ratio, together with other indicators, can give an idea of which banks are the best plays in economic recovery.
Banks tend to perform well in the economic recovery phase, because in an economic recovery phase, loan growth is rising and yields on loans are rising. At the same time, non-performing assets are falling. These factors benefit the banks doubly. This makes Sun Trust and US Bank a good play on economic recovery. Both these banks are a part of the Financial Select Sector SPDR (XLF). Sun Trust accounts for a small 0.71% of the portfolio weight of XLF.