S&P Global this week reported that equity research analysts raised their 2025 loan growth projections for the U.S. banking sector following stronger-than-expected second-quarter results.
For the nation’s 20 largest publicly traded banks by assets, median net loan growth expectations climbed 123 basis points — to 4.1% — between June 30 and Aug. 4, according to an S&P Global Market Intelligence analysis of Visible Alpha data. Across all major exchange-traded banks, estimates rose a smaller 64 basis points over the same period but reached a higher overall growth forecast of 5.6%.
The analysis included only U.S. banks with at least three 2025 net loan growth estimates from Visible Alpha as of Aug. 4. While full-year projections improved, expectations for the second half of 2025 edged lower, reflecting the fact that many banks had already outpaced forecasts in the second quarter.
Indeed, actual Q2 loan growth surpassed forecast revisions for all but four of the top 20 banks — Citizens Financial Group, Huntington Bancshares, KeyCorp and Flagstar Financial. Collectively, the top 20 banks posted $12.9 billion more in growth than analysts had anticipated, while the broader group of banks exceeded estimates by $64.65 billion.
The rebound in full-year projections marks a turnaround after analysts trimmed loan growth estimates earlier this year. Median growth expectations fell in the first half of 2025 amid heightened market uncertainty, particularly after President Donald Trump’s April 2 announcement of a new U.S. tariff plan sent bank stocks sliding. For the top 20 banks, estimates dropped 27 basis points in the first quarter and another 26 basis points in the second. Across all exchange-traded banks, estimates fell 20 basis points in Q1 and 80 basis points in Q2.
Potential loan growth headwind
Results from the most recent Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that many banks reported some loan demand softness.
A greater percentage of banks that responded to the survey — which was conducted from June 18 to July 2 — reported less demand for C&I loans, which was a driving force for large bank loan growth in the second quarter.
The Federal Reserve said reasons given for softer demand included "lower customer investment in plant or equipment as well as decreased customer financing needs for merger or acquisition and inventory." The Fed also noted that banks "cited customers’ decreased accounts receivable financing needs, lower precautionary demand for cash and liquidity, higher internally generated funds, and alternative sources for borrowing as important reasons for weaker demand."
Additionally, banks reported that demand for CRE lending across the spectrum declined in the second quarter, while demand was up for auto loans.