Commercial and industrial loan portfolio at U.S. banks grew for the fourth consecutive quarter — albeit at a slower pace — at the end of September as lenders noted continued demand for loans from companies.

Jitters over liquidity induce loan demand

The banking industry's overall commercial and industrial, or C&I, loan balance ended at $2.503 trillion as of Sept. 30, up 0.6% sequentially and 11.6% on a year-over-year basis, according to data analysis by S&P Global Market Intelligence.

"We saw good commercial loan demand," Bank of America Corp. CFO Alastair Borthwick said during the bank's third-quarter earnings call.

Wells Fargo & Co. President and CEO Charles Scharf observed that businesses' anxiety over market and economic conditions somehow helped buoy commercial credit demand.

"They are nervous about the liquidity in the marketplace — nervous to the point of just wanting to ensure that they have liquidity and that they've got the appropriate lines and the ability to borrow from us. So, we still continue to see some demand there," Scharf said at a Dec. 6 industry conference.

Loans grow YOY at majority of top C&I lenders

Bank of America, the biggest lender to the C&I sector, booked a total of $326.99 billion of C&I loans in the third quarter, reflecting a 0.9% dip from the second quarter, but a 19.6% jump from a year ago.

JPMorgan Chase & Co.'s total C&I loans for the period ended at $197.55 billion, up 2.0% sequentially and 10.5% year over year. Wells Fargo posted the third biggest C&I loan balance in the most recent quarter, at $190.50 billion, up 3.1% from the previous quarter and by 21.2% from the year-ago period.

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Conversely, Citigroup Inc., although emerging as the fourth biggest C&I lender, saw its third-quarter C&I loan balances slip both sequentially and year over year.

Among the top 25 U.S. lenders to the C&I sector, First Citizens BancShares Inc. recorded the biggest quarter-over-quarter increase in C&I loan balances of 8.7%, while HSBC North America Holdings Inc. posted the biggest year-over-year jump of 273.7%.

Of the top lenders, only seven had lower C&I loan balances from the previous quarter and only two had declines from a year ago.

Delinquency ratio ticks up

U.S. lenders saw a 1.11% uptick in their overall C&I delinquency ratio from the previous quarter and an 8-basis-point increase year over year.

Goldman Sachs Group Inc. posted the biggest year-over-year decline of 285 basis points in C&I loan delinquency ratio in the most recent quarter.