U.S. Banks Increasing Cash Reserves Amid Stagnant Lending

Recent analysis from S&P Global reveals that U.S. banks are accumulating cash, indicating a decline in lending activities.

In the first quarter of 2025, the cash equivalent holdings of banks surged by $886.6 billion, according to the firm.

Notably, JPMorgan Chase and Citibank, which rank as the first and third largest U.S. lenders by total assets, are major contributors to this growth, largely due to a rise in deposits from international sources.

“During the first quarter, banks opted to hold more in cash equivalents while customers appeared hesitant regarding the implications of tariffs,” a representative mentioned.

On a different note, loan growth for the same period remained under 1%.

Specifically, banks are likely to reduce offerings in credit cards, non-home construction, agriculture, and auto loans, hinting at trends that might persist going forward.

“Analysts have scaled back growth expectations for net loans among the largest public banks in the U.S. and do not foresee significant upturns for the rest of the year,” the report stated.