U.S. regional banks signal resilient lending demand in third quarter

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Regional banks resilient lending Q3

Highlights

PNC Financial posts 14.2% third-quarter loan growth, leading U.S. regional banks as commercial lending demand shows no slowdown.
Citizens Financial and other executives state AI infrastructure spending strongly boosts loan demand, with pipelines solid entering the fourth quarter.
U.S. Bancorp CFO John Stern reports loan growth in retail, food and beverage, and insurance, demonstrating broad-based demand beyond AI-linked sectors.

Third-quarter loan growth stays broad-based

As reported by Reuters, a group of U.S. regional banks posts strong third-quarter earnings as commercial lending demand holds up, with executives saying they have not yet seen a slowdown in client appetite for borrowing.

PNC Financial leads the group with loan growth of 14.2% in the quarter, followed by U.S. Bancorp at 8%, M&T Bank at 5.5% and Citizens Financial at 5.29%. The results add to earlier reports from JPMorgan Chase, Bank of America, Wells Fargo and Citigroup, which also disclose higher loan balances even as weaker capital markets weigh on investment banking revenue.

PNC Financial CEO William Demchak says companies are adapting to global uncertainty and continuing to move ahead with operations and investment. He says the economic backdrop remains strong even with persistent risks and higher rates.

AI spending and corporate investment support outlook

Regional bank executives say loan pipelines remain solid, and Citizens Financial says demand begins to pick up in the last couple of weeks as the bank enters the fourth quarter.

Analysts press lenders on how much of the growth is tied to heavy spending linked to artificial intelligence infrastructure. Citizens Financial CEO Bruce Van Saun says the AI build-out is a strong driver across a wider supply chain, adding that demand for computing capacity remains firm despite higher borrowing costs.

PNC, which does not have a large data-center finance business, says the AI spending boom still reaches related sectors including heavy equipment, transportation and energy. At the same time, some regional lenders play down dependence on AI and point to broader commercial and industrial loan growth, with U.S. Bancorp CFO John Stern highlighting strength in retail, food and beverage, and insurance.

Our earlier analysis of the Nasdaq 100’s slide highlighted how a pullback in AI-linked stocks, combined with higher-rate concerns, pushed the index toward one-month lows and kept sentiment fragile. We also noted that technical indicators were strongly bearish, with consolidation expected unless the index reclaimed key resistance levels.

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