Consumer loans rise as the economy grows
Consumer demand has been rising steadily in the United States as a result of growing confidence in economic growth. The US gross domestic product (or GDP) has grown from $1.48 trillion to $1.79 trillion from April 2010 to June 2015 while personal consumer expenditure has risen from $1.01 trillion in the same period. Although the pace of growth may vary, this growth is directly reflected in consumer loan growth. Total consumer loans have grown by 4.47% in 2Q15 as compared to 2Q14.
Major components of consumer loans are credit card loans, auto loans, and student loans. Credit card loans form 25.5% of total consumer loans in the United States while auto loans form 12% of total consumer loans. Credit card loans have grown by 4.24% in 2Q15 while auto loans have grown by a meager 1.16%.
Market share of banks
J.P. Morgan (JPM) has the highest market share of consumer loans in the United States. Of the total consumer loans of $3.39 trillion, J.P. Morgan owes 5.37% of them. Bank of America (BAC) and Wells Fargo (WFC) follow with market shares of 4.90% and 3.59%, respectively.
Within the credit card loans segment, the largest player is Citigroup (C) with a market share of 19.5%. Investors looking for exposure to these banks could consider the Financial Select Sector SPDR ETF (XLF).