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.

Consumer Loans Grow in Line with Personal Consumption Expenditure

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).

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