Wisconsin bankers claim they are ready to ramp up loans

Citing recently released numbers from the Federal Deposit Insurance Corp., Wisconsin bankers are ready to lend “pure and simple,” according to Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. The only problem is, loan demand continues to rise slowly.

In the latest numbers, there are several signs of incremental progress. Total deposits grew 1.8% over the past year, or $1.3 billion, a sign of continuing consumer confidence in the strength of Wisconsin’s banks, and a growing trend in consumer savings. Meanwhile, net loans and leases grew 0.32% ($205,409,000), bank assets grew 0.39% ($378,364,000), and total equity capital grew 1.5% ($178,780,000).

In addition, noncurrent loans and leases – those 90 days or more past due or in nonaccrual status – shrank by 30.5% ($679,840,000).

However, loan demand hasn’t fully returned to pre-recession levels, as net loans and leases, while up from a year ago, continue to improve much more slowly than the overall recovery of the state’s banks.

New regulations that increase the cost of loans could further slow momentum. “WBA will be watching loan demand in the upcoming year with a focus on residential loans,” said Oswald Poels. “Considering the new mortgage lending rules which go into effect Jan. 1, 2014, it is hard to predict what loan demand will look like in another year. The new rules are likely to increase the cost of loans and the amount of time it takes to get a loan. They may even limit the choice of loans for consumers or the amount of loans issued.”

Oswald Poels said banks have not only been strengthening their financial positions, they’ve also reviewed and streamlined internal processes to meet forthcoming regulatory changes.