Lending Industry Overview

Companies that provide loans and other credit and financing products.

Full Lending Industry Description

Industry Consolidation

Consolidation

Specialization

In the past 10 years, the number of commercial banks in the US dropped by almost 30 percent. Large economies of scale in banking operations have encouraged consolidation, which has produced several dozen very large banks with more than $50 billion in assets. Smaller banks are still able to thrive by providing personal attention smaller customers don't get from large institutions.

Several factors have encouraged consolidation in recent years: larger companies have easier and cheaper access to capital markets, computer systems can now handle credit analysis and loan tracking functions for large portfolios of loans, and the industry's strong profitability has prompted many companies to expand by buying smaller firms that already have offices, personnel, and a local presence.

Economies of scale encourage mortgage bankers to specialize in one particular activity, such as loan origination, loan servicing, or portfolio management. Many smaller companies specialize in loan production and immediately resell their loans to larger companies. Some companies don't originate loans but buy servicing rights or specialize in delinquent loans. Generally, only the largest companies have the resources to manage a large portfolio of mortgages.

Full Lending Industry Trends

• Rabo AgriFinance
• Norwich and Peterborough Building Society
• AB Svensk Exportkredit

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Hoover's has developed its own industry classifications to better serve its customers. These classifications are mapped to the North American Industry Classification System (NAICS) and the older U.S. Standard Industrial Classification (SIC) system. The Lending maps to a number of NAICS codes including:

Full Lending Industry Codes

• Financial Services Technology Consortium
  
• Investment Company Institute
  
• The Association of Private Client Investment Managers and Stockbrokers
  

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