Key facts
- Regional banks reported strong third-quarter earnings.
- Loan demand from businesses remained robust.
- AI-related spending is a significant factor in loan growth.
- PNC Financial CEO William Demchak noted the economy remains strong despite dark clouds.
- Citizens Financial CEO Bruce Van Saun highlighted the desire for compute power despite higher rates.
US regional banks reported strong third-quarter earnings this week, with robust loan demand from businesses contributing to signs of a resilient economy despite rising borrowing costs. PNC Financial led regional banks' loan growth at 14.2% in the third quarter, followed by U.S. Bancorp at 8%, M&T Bank at 5.5%, and Citizens Financial at 5.29%. Banking executives noted that AI-related spending is a significant driver of loan growth, with demand remaining strong even with higher interest rates. Some banks, however, emphasized broad-based commercial and industrial loan growth outside of AI-adjacent sectors.